Abbott Labs (ABT) is Ripe for the Picking Before End of FY12 - Cramer
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Price: $106.23 -0.62%
Rating Summary:
18 Buy, 10 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 10 | Down: 12 | New: 7
Rating Summary:
18 Buy, 10 Hold, 1 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 10 | Down: 12 | New: 7
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Abbott Labs (NYSE: ABT) is ticking higher on the session amid stock wunderkind Jim Cramer making some bullish comments on the stock Thursday night.
Cramer notes that Abbott has two catalysts going for it moving forward. First, Abbott is scheduled to split into two companies start on January 1, 2013. Since the news was announced in October 2011, the stock has notched about 21 percent of upside.
Abbott will split into a pharmaceutical unit and diagnostic and medical devices unit. Cramer notes that the two companies will be worth more than the combined company, given differing rates of growth between the two. He thinks that the new Abbott Labs will be a faster growth company with a lower yield, while the pharma unit will be slower growth with a 4 percent yield. Put them both together and you have a stock that's worth about $74 per share.
The other catalyst that Cramer alluded to was Abbott's hepatitis C treatment. News on the progress of development will be issued at an upcoming investor conference. (Note: on October 16th, Abbott said that full results for its "Aviator" study would be presented at the Latebreaker Session of The Liver Meeting, the Annual Meeting of the American Association for the Study of Liver Disease (AASLD) in Boston, November 9-13.)
With Abbott trading for just 12.2 times earnings and a 9 percent growth rate, Cramer expects to buy into Abbott through the end of the year, particularly if shares drop another 8 points in the process.
Shares of Abbott are up 2.4 percent on the session Friday.
Cramer notes that Abbott has two catalysts going for it moving forward. First, Abbott is scheduled to split into two companies start on January 1, 2013. Since the news was announced in October 2011, the stock has notched about 21 percent of upside.
Abbott will split into a pharmaceutical unit and diagnostic and medical devices unit. Cramer notes that the two companies will be worth more than the combined company, given differing rates of growth between the two. He thinks that the new Abbott Labs will be a faster growth company with a lower yield, while the pharma unit will be slower growth with a 4 percent yield. Put them both together and you have a stock that's worth about $74 per share.
The other catalyst that Cramer alluded to was Abbott's hepatitis C treatment. News on the progress of development will be issued at an upcoming investor conference. (Note: on October 16th, Abbott said that full results for its "Aviator" study would be presented at the Latebreaker Session of The Liver Meeting, the Annual Meeting of the American Association for the Study of Liver Disease (AASLD) in Boston, November 9-13.)
With Abbott trading for just 12.2 times earnings and a 9 percent growth rate, Cramer expects to buy into Abbott through the end of the year, particularly if shares drop another 8 points in the process.
Shares of Abbott are up 2.4 percent on the session Friday.
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