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.