This is a step-by-step stock review to answer the question, is Abbott Laboratories (ABT) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Abbott Laboratories (ABT) stock a good buy?
1. Abbott Laboratories Company History
- Founded in 1888: Abbott Laboratories was established by Dr. Wallace C. Abbott in Chicago, Illinois.
- Initial Focus: The company initially specialized in creating innovative pharmaceuticals and nutrition products.
- Early Success: Abbott gained recognition for its groundbreaking development of the first ready-to-use liquid medical products.
- Expansion: Throughout the 20th century, Abbott diversified into diagnostics, nutrition, and medical devices.
- Global Reach: Today, Abbott operates in over 160 countries, impacting millions of lives worldwide.
- Milestone Innovations: Abbott introduced several key products, including the first HIV test in 1985 and the Freestyle Libre, a revolutionary glucose monitoring system.
- Acquisitions: The company has strategically acquired firms to enhance its product portfolio, including the purchase of St. Jude Medical in 2017.
- Commitment to Health: Abbott focuses on cutting-edge research and development to improve healthcare and nutrition globally.
- Sustainability Goals: Abbott is dedicated to sustainable practices and improving access to healthcare through innovative solutions.
- Today’s Vision: Abbott continues to prioritize health innovation, striving to create products that help people live healthier lives.
2. MOS (Margin Of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: Overpriced
- Score: 28
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Abbott Laboratories makes money:
- Pharmaceuticals: Abbott makes money by selling prescription medications for various health conditions.
- Medical Devices: The company produces advanced medical devices, such as heart monitors and stents, used in hospitals and clinics.
- Diagnostics: Abbott offers diagnostic tests and equipment that help detect diseases, including infectious diseases and cancer.
- Nutrition Products: The company sells nutritional supplements and baby formula, catering to various age groups and health needs.
- Continuous Glucose Monitoring: Abbott’s Freestyle Libre system provides real-time glucose monitoring for diabetes patients, generating significant revenue.
- Acquisitions: By buying other companies, Abbott expands its product lines and increases its market reach, boosting overall income.
- Research and Development: Abbott invests in R&D to create new products, ensuring ongoing revenue from innovative healthcare solutions.
- Global Sales: Abbott’s presence in over 160 countries allows it to reach diverse markets and increase sales worldwide.
- Partnerships: Collaborations with healthcare providers and organizations help Abbott expand its product offerings and increase revenue streams.
- St. Jude Medical
- Alere Inc.
- Diabetes Care Division of Siemens
- Solvay Pharmaceuticals
- Piramal Healthcare’s Nutrition Business
- Topera, Inc.
- CardioMEMS, Inc.
- Tendyne Holdings, Inc.
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Abbott Laboratories stacks up against other companies.
- Stryker Corporation.(SYK) – 89
- Edwards Lifesciences Corporation.(EW) – 72
- Penumbra, Inc.(PEN) – 72
- Globus Medical, Inc.(GMED) – 67
- Boston Scientific Corporation.(BSX) – 61
- Abbott Laboratories.(ABT) – 28
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- CEO Appointment: Robert B. Ford became CEO of Abbott Laboratories in 2020, leading the company through critical growth phases.
- COVID-19 Response: Under his leadership, Abbott quickly developed and launched COVID-19 tests, helping to meet urgent global health needs.
- Freestyle Libre Expansion: Ford drove the growth of the Freestyle Libre product line, making diabetes management easier for patients worldwide.
- Acquisitions: He oversaw key acquisitions, including St. Jude Medical, enhancing Abbott’s portfolio in medical devices.
- Focus on Innovation: Ford emphasized research and development, resulting in new therapies and medical technologies that improve patient care.
- Global Market Growth: He expanded Abbott’s presence in emerging markets, increasing access to healthcare products.
- Sustainability Initiatives: Ford promoted sustainable practices within the company, focusing on environmental and social responsibility.
- Strong Financial Performance: Under his guidance, Abbott achieved record revenues and profits, demonstrating business resilience.
- Employee Engagement: Ford prioritized employee well-being and development, fostering a strong corporate culture at Abbott.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Abbott Laboratories (ABT) is 58/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Abbott Laboratories (ABT) stock a good buy?
Some of the top questions investors can have is Abbott Laboratories (ABT) stock a good buy or should I buy Abbott Laboratories (ABT) stock?
Abbott Laboratories is a promising investment opportunity for several reasons. First, the company boasts a diverse product portfolio that includes pharmaceuticals, medical devices, and diagnostics, which reduces risk and ensures steady revenue. Abbott’s strong growth potential is highlighted by ongoing innovations like Freestyle Libre for diabetes management. With operations in over 160 countries, Abbott effectively taps into emerging markets, expanding its customer base. The company has demonstrated solid financial performance, with consistent revenue and profit growth reflecting its stability and resilience. Additionally, Abbott’s commitment to research and development leads to new treatments and technologies that can drive future sales. As global healthcare needs continue to rise, Abbott is well-positioned to benefit from increased demand for its products. Overall, Abbott Laboratories represents a strong investment opportunity due to its diverse offerings, growth potential, and focus on innovation.
—
The Summary, Score, and MOS of this stock may have changed since the posting of this review. Please login to Tykr to see up-to-date information.