Hi Spekulatius
RE: LIFE, BDX, VAR & Applied Bio Systems
In the late 80's I invested in a theme of companies that designed, built, serviced and supplied the biotech industry test equipment and consumables for genetic research. One of the companies I owned was Applied Bio Systems ( en.wikipedia.org )which was later acquired by Perkin Elmer then merged with Invitrogen to create a global biotech company called Life Technologies (Life Technologies Corporation (LIFE). What attracted me to this sector was the huge cash flow generated from the consumable reagents sold that were use in their DNA sequencing equipment.
Both Varian Medical Systems Inc. (VAR) (formerly known as Varian Associates, Inc.) and Becton, Dickinson and Company (BDX) were companies I followed. When my Applied Bio Systems was bought out, I stopped following the group and moved on to other investment themes.
It's interesting to note that the survivors VAR & BDX have little debt, continue to generate excellent cash flows and have grown to be global companies. Many of the companies like (Life Technologies Corporation (LIFE) carry a lot of goodwill on their books representing the collection of companies acquired over this period. They also have accumulated lots of debt too. In the case of LIFE they have more than 8x the debt load relative to their annual revenues than BDX.
I wonder if it time to search out the past legacy innovators that have remained independent, have grown and developed their business and are ripe "value buys" that have little debt. The management style for these types of companies show that they are survivors, are not interested in being acquired, are in the business for the long hall and deliver growth and shareholder value year after year.
I am more convinced now that BDX is one of these companies as I reflect back on my basket of bio-tech stocks that I followed. I think I will investigate further and go "Back To The Future" to see if any other legacy survivors pop up from my old lists.
EKS |
