BIO

Bio-Rad Laboratories Inc

Healthcare


Presented:11/20/2017
Price:$255.29
Cap:$7.67B
Current Price:$342.16
Cap:$9.54B

Presented

Date11/20/2017
Price$255.29
Market Cap$7.67B
Ent Value$6.39B
P/E Ratio323.15x
Book Value$95.70
Div Yield0%
Shares O/S30.05M
Ave Daily Vol177,660
Short Int3.11%

Current

Price$342.16
Market Cap$9.54B
Bio-Rad Laboratories, Inc. engages in the development and production of specialty chemicals used in biochemical, pharmaceutical, and other life science research applications. The company operates through followings segments: Life Science and Clinical Diagnostics. The Life Science segment develops, manufactures and markets reagents, apparatus, and laboratory instruments. The Clinical Diagnostics segment designs, manufactures, sells and supports test systems, informatics systems, test kits and specialize in quality controls that serve clinical laboratories in the global diagnostics market. Bio-Rad Laboratories was founded by David S. Schwartz and Alice N. Schwartz in 1952 and is headquartered in Hercules, CA.

Publicly traded companies mentioned herein: Allergan plc (AGN), Bio-Rad Laboratories Inc (BIO), Sartorius AG (SRT GR), Thermo Fisher Scientific Inc (TMO)

Highlights

Bio-Rad Laboratories (BIO) appears to be a compelling turnaround story, and a combination of self-help on margins, capital allocation, and the value of its substantial stake in Sartorius could drive meaningful upside for shareholders over the next 2-3 years. Near-term, BIO’s Nov 28 Investor Day could provide more insight into the drivers of the upside potential. The presenter is long at $255, and sees the recent completion of BIO’s enterprise resource planning software (ERP) investment/ upgrade cycle as a major potential catalyst for margins. Additionally, the value of BIO’s “hidden” stake in Sartorius, which is worth ~1/3 of the market cap, is something that should garner greater appreciation over time; and, free cash flow can be directed toward stock buybacks. If Bio-Rad trades at 14x the presenter’s 2020 EBITDA forecast, and a conservative value is ascribed to the Sartorius stake, the base case 12-24-month price target range is $335-365.

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Idea Discussion

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