Polen Global Growth: “Abbott Laboratories (ABT) Continues to be Fairly Valued”

Polen Capital, an investment management firm, published its “Polen Global Growth” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 1.39% was delivered by the fund for the Q1 of 2021, trailing its MSCI All-Country World benchmark that delivered a 4.58% return for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Polen Global Growth Fund, in its Q1 2021 investor letter, mentioned Abbott Laboratories (NYSE: ABT), and shared their insights on the company. Abbott Laboratories is a Chicago, Illinois-based medical device company that currently has a $211 billion market capitalization. Since the beginning of the year, ABT delivered an 8.44% return, extending its 12-month gains to 32.08%. As of May 13, 2021, the stock closed at $117.45 per share.

Here is what Polen Global Growth Fund has to say about Abbott Laboratories in its Q1 2021 investor letter:

“Abbott Laboratories developed and commercialized multiple COVID tests during 2020, delivering a double-digit performance in what could have otherwise been a very challenging year. Management expects earnings per share to grow more than 30% in 2021. We believe it is poised to sustainably deliver double-digit earnings per share growth even as COVID testing sales decline from an expected $6.5-7.5 billion in the fiscal year 2021 to potentially as low as $300-$500 million several years from now.

We have always been believers in Abbott management’s capital allocation prowess, and we think they continue to invest prudently.

Management is taking advantage of the COVID test profits to invest roughly $2 billion into R&D and marketing to bolster growth in the core business as it recovers from the pandemic. We think there could even be a durable increase in the longer-term growth rates of both the diagnostics and medical device segments, given investments in product development and direct-to-consumer (DTC) capabilities. Testing sales created a windfall for Abbott in the near term, and management is exploiting it with what we view as sound capital allocation.

We believe the company continues to be fairly valued despite being rewarded for such favorable business momentum during the quarter.”


Our calculations show that Abbott Laboratories (NYSE: ABT) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Abbott Laboratories was in 64 hedge fund portfolios, compared to 62 funds in the third quarter. ABT delivered a -7.44% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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