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Strategies & Market Trends : Fundamental Value Investing

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From: bruwin	5/7/2010 4:20:29 PM
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BDX Looks a good company to me. I'd watch this one in the present up/down Market and when up move looks confirmed from its bottom I'd say it's a Buy. Projecting its EPS forward 6 months I'd say we could see its 12 month EPS at $5.80c. Over the longer term we've seen investors prepared to trade BDX at a P/E between 14 to 19. So from that we could have BDX trading in 6 months time between :- $5.80 x 14 = $81 $5.80 x 19 = $110 If we look at BDX on the basis of Buffett's Equity Bond we have :- Average between 10 year AA and 20 year AA = (4.46+5.11)/2 = 4.8%. BDX's TTM Pretax Income/share = $7.30c Share Price = $7.30/4.8% = $152/share. So we have a price range in 6 months time of between $81 to $110 with a high end of $152, which may be a tough one to meet. Currently BDX trades at about $74 so a target of average $95 (28% increase) in 6 months could be attained.

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