For readers of Matt Krantz’ latest column: “Abbot’s stock worth a look“.
Abbott Laboratories (ABT) earned our Attractive Rating. To get this rating, ABT achieved high quality-of-earnings (1) positive economic profits (as distinct from accounting profits**) and (2) a cheap valuation. As shown in our free report on ABT, the company’s ROIC (at 14%) is in the Second Quintile of the 3000+ companies we cover.
HIDDEN GEM: ABT’s current stock price (~$45 per share) implies the company’s profits will permanently decline by 20%. In other words, the market is not only giving no credit for future profit growth, it is predicting a significant (20%) decline in profits.
See Appendix 4 to learn how ABT increased NOPAT by and increased its NOPAT Margin as expenses grew more slowly than revenue. See Appendix 5 for details on its Invested Capital. Our report provides all details behind our conversion of reported accounting earnings into true economic earnings.
As per Investment Strategy 101 and How to make money picking stocks, ABT has Attractive Risk/Reward.,
**See Finance 101 and Economic Versus Accounting Profits for more detail on why accounting profits are not reliable indicators of corporate profitability or value creation.
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