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Strategies & Market Trends : Disciplined Investing, especially the NAIC way -- Ignore unavailable to you. Want to Upgrade?

To: - with a K who wrote (382)	2/9/2003 1:42:56 PM
From: - with a K	Read Replies (2) \| Respond to of 469

Baxter International (BAX) anyone? I was curious to look into BAX after it was featured as an Undervalued Stock in the March BI issue. A quick look leaves me a little confused. Using an ave high PE of 27.6, future EPS growth of 8.4%, and a low price of $20.42, I get a buy up to $32 with an up/down of 5.7. Debt is high but declining. ROE has been climbing since 1998 on my SSG, but other sources show it dropping (?) and currently less than Guidant and Stryker. It sports a nice yield of 2.2% which is very attractive to me in this climate. It made a VL screen done by NAIC for earnings predictability, total return over 25%, and financial strength (Nov.) A 3-yr. chart is scary. Sales growth shows up on other sites as significantly less than earnings growth the last 5 years (6% vs. 19%), but the OPS SSG has them both at around 7% (?). Strange. I get different trailing PE ratios that are somewhat concerning: SSG: 14.2 SmartMoney.com: 21.8 First Call: 13.8 S&P: 22.4. Could this be simply how different organizations calculate trailing PEs or is it more ominous? S&P gives a fair value of $39 but has it as an "Avoid" citing plasma business concerns and earnings quality issues(?) My FV calculation: Company: BAX Date: 2/7/03 2003's expected earnings: $2.10 (v.s consensus of $2.24) Estimated percent 7-10 years EPS growth rate: 9 (vs. 5-yr. consensus of 15%) P/E maximum if not 8.5: 11 Graham Fair Value: $42.87 Current Price: $27.50 $ difference: $15.37 Percent Growth to Fair Value: 55.90% Any thoughts? - Kris