Sporadic Thoughts: Aroung the Eearnings Block and Bargain Basement?

Becton Dickenson (BDX) is another darling of mine that reported 3rd quarter numbers today. Revenues grew 8% (excluding currency benefit) and performance was very solid across all segments - a sign of business quality.

Sporadic Thoughts Aroung the Eearnings Block and Bargain Basement

Around the earnings block…

Becton Dickenson (BDX) is another darling of mine that reported 3rd quarter numbers today. Revenues grew 8% (excluding currency benefit) and performance was very solid across all segments – a sign of business quality. BDX’s business lends itself to fairly good operational leverage, which was apparent in this quarter’s performance as margins expanded, driving 20% EPS growth, INCLUDING stock based compensation EPS up 11.7% – still great performance. As I mentioned before, BDX is a good way to participate in rising healthcare spending without the risks and volatility that come with owning drug stocks.

On a less upbeat note, BJ Wholesale (BJ) reported mediocre (to say the least) 2.9% same store sales for October; the Street was expecting 5.1%. The company blamed results on a shift of Halloween into its November reporting period and Hurricane Wilma in Florida. Interestingly, Halloween and Wilma did not have the same impact on Costco (COST), which saw its same store sales up over 8% in the quarter. Were BJ’s customers the only ones that shifted their shopping into November? Though the company did not change its guidance and one month does not set a trend, I am putting BJ’s on a double secret probation.

Bargain basement?

Not yet According to the Financial Times, 48% of VNU shareholders oppose the VNU / IMS Health (RX) deal – Halellujah! As I mentioned in this article, we sold RX on the merger announcement, as merger of these loosely-related businesses made absolutely no sense. Though I am happy that deal is unlikely to be consummated, I’ll not be jumping into RX shares… unless RX visits a bargain basement price, and I have not determined what that may be yet. RX’s management lost a lot of credibility in my eyes and, more importantly, in the eyes of investors.

Please read the following important disclosure here.

Related Articles

Next Year in Omaha (2024 Edition)

It is time to plan for my annual pilgrimage to Omaha! I am very sad because, for the first time, Warren Buffett will not be joined onstage by Charlie Munger, who passed away in November.
Putting a Charge Back into the EV Market

Putting a Charge Back into the EV Market

Over the last few months, electric car sales seem to have gone from hot to cold. Are electric cars a fad, like beanie babies, pet rocks, or fidget spinners?
My thoughts on AI

My thoughts on AI

Innovation disrupts, but it also creates new jobs and improves the standard of living of society. AI will displace many jobs, but it will also empower people with new productivity tools.

Tax Loss Harvesting

I wrote the following to clients on tax loss harvesting, which is something many investors are either contemplating or ... Read more

Leave a Comment