I was wrong with saying at the end of March that CR Bard seems to be expensive (read more). Since that time share price climbed by another 10+% and trend is continued. Look at 5Y chart, there are not so many stocks like this:

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As you probably know me you know that I will not buy shares at all time high levels. Nevertheless it is important to know what is going on with company.

Valuation is very demanding with P/E = 23.5; EV/EBITDA = 15.4 and dividend yield only 0.4%.

Why investors are willing to pay so much?

I am not really sure, but what I expect is that company is a long term bet. People all over the world are aging(see below Chinese data) and if only CR Bard will remain a market leader then profits should skyrocket in long term perspective.

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But even in short term there are positive triggers – look at tremendous Q1 results:

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Reported EPS was around 10% above guidance! Moreover guidance for Q2 is strong with expected growth of around 7-9%. Also full year guidance was changed and now company expect to increase EPS by 11-12%. Well, these are very strong figures as it comes for company with such strong market position.

 

Summing up, I keep my opinion unchanged – everyone should have it in portfolio. The question is price to build position, which is currently too high in my opinion.

 

Disclosure BCR– no position