baxter international inc. sadia ritu. global diversified
TRANSCRIPT
Baxter International Inc.Sadia Ritu
Global Diversified
History Founded by Dr. Don Baxter in 1931 First manufacture of commercially prepared IV
solutions Bought out by Dr. Ralph Falk in 1935 and
development of a research division Headquarter in Deerfield Illinois 1939 ‘Transfuso-Vac container’, the first sterile,
vacuum-type blood collection and storage unit.
2011 Sales by Business
BioScience Recombinant (36%) Antibody Therapy (26%), Plasma Proteins (23%), Regenerative Medicine (11%) others (4%).
Medical Products Renal (32%) Global Injectable (26%), IV Therapy (24%), Infusion System (10%), Anesthesia (7%) Others (1%)
Sales and distribution
Supplier Relations
Operations
Research and Development
2011 Sales by Region
Regional Growth:North AmericaEurope, Middle East & AfricaLatin America & CanadaAsia Pacific
Acquisitions
IndustryMedical Instruments and Supplies Industry -106.6 billion -5.8% growth rateHealthcare sector In the U.S., people over the age of 65 is expected to be about 49.7 million over the next 5 years.
The economic effectHealthcare ReformTax increase in 2013
Management & Employees Baxter’s management guidance
Svigals Portfolio: 45 shares currently($50.13/ share) 31.28% unrealized gainTall Firs Portfolio: 340 BAX shares purchased in 2003-04 ($27-28/ share) about 120% unrealized gain
Portfolio History
DownsideFDA and EMA risk of approval. SuppliersUpcoming tax increase of 2013 on medical device companies.Product quality or patient safety issues, leading to product recalls or withdrawals. Fluctuations in foreign exchange and interest rates.
Recent Happenings:
Baxter Said to Near Deal to Buy Gambro for $4 Billion -Nov 24, 2012
Baxter Declares Quarterly Dividend –Nov 13, 2012
Dividends
FMS30%
COV22%
MDT5%
BDX43%
Discounted Cash Flow Analysis
-BetaBeta SD Weighting
3 year Daily 0.76 20.00%
5 year weekly 0.54 13.00%
1 year daily 0.81 18.00%
5 year monthly 0.49 5.00%
Vasicek 3 year daily 0.79 24.00%
Hamada 3 year daily 0.80 20.00%
Baxter International Inc. Beta 0.74
-Revenue Model-Cost Of Goods Sold
-SG&A-Cap Ex-Tax Rate
Weights: DCF-70%Comp-30%
Implied Price: $70.94
Questions?
Hold
RecommendationLong term growth80 years long Healthcare leaderGlobal expansionsDiverse