Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Abbott Laboratories (ABT), AbbVie Inc (ABBV): 6-Month Checkup

Page 1 of 2

Technically, Abbott Laboratories (NYSE:ABT) has been around for decades. But the new Abbott Laboratories stock — the one that no longer contains the drug division spun off as AbbVie Inc (NYSE:ABBV) — has existed for only six months.

Seems like a good time for a checkup.

FIX Hedge Funds Are Crazy About Abbott Laboratories (NYSE:ABT)

What’s left?
After sending the drugs, including the world’s best-selling drug, Humira, to AbbVie Inc (NYSE:ABBV), Abbott is left with four divisions:

  • Nutrition — probably a low-margin business. How much can you mark up baby formula and muscle powder?
  • Diagnostics — interesting, especially with the development of personalized medicine, but it’s the smallest of the four globally, and very little of the sales come from the U.S., where it could probably get higher prices.
  • Established pharmaceuticals — using a euphemism for generic drugs sold overseas, doesn’t make them any more interesting.
  • Medical devices — it’s a tough business. U.S. sales were down nearly 13% year over year in the first quarter.

The reason Abbott Laboratories (NYSE:ABT) split off AbbVie Inc (NYSE:ABBV) was clear: Independently, Abbott Laboratories stock and AbbVie stock were supposed to grow faster than the combined company.

That might actually turn out to be true, but Abbott Laboratories (NYSE:ABT) got the unsexy slow-growth side of the stock. Since the split, Abbott Laboratories stock has matched the S&P 500, while AbbVie Inc (NYSE:ABBV) has doubled the index’s return.

ABT Chart

ABT data by YCharts

It seems investors are just uninterested in owning Abbott Laboratories stock. I know I am.

Turning things around
The most interesting division is Abbott Laboratories (NYSE:ABT)’s diagnostic business. The company sells devices that can run different diagnostic tests. Abbott doesn’t break out margins, but it seems safe to assume it’s making more on the tests than it is on the machines, which has proved to be a successful business model. Investors should keep an eye on the ever-increasing options for tests that Abbott is developing. It recently gained FDA approval for a test to genotype hepatitis C infections, for instance.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!