Should You Invest in Abbott Labs?

A number of analysts and hedge funds are maintaining or increasing their estimation of health care titan Abbott Labs.For example,Deutsche Bank reaffirmed its buy on the stock on 19 March;BTIG Research reaffirmed its buy rating on 26 April;Credit Suisse reaffirmed on 17 April;Wells Fargo reaffirmed on 28 April,as did Jefferies Group.Overall,there were six holds and 18 buys on the stock,as well as one strong buy.*
Among the hedge funds,Neuberger Berman increased its Abbott holdings by 9.7% in Q4;DNB Asset Management hiked its Abbott holdings by 69.7%;and Cambiar Investors LLC raised its stake in Abbott by 4.6% in Q4.*
Abbott Labs was founded in 1888 by physician and drug store owner Wallace C. Abbott (People's Drug Store,Chicago),who eventually began manufacturing drugs himself.Today it employs about 73,000 in more than 150 countries.Its four operating segments and some of their products are Nutrition (Similac,Ensure,Glucerna,PediaSure);Medical Devices (glucose monitoring and laser vision-correction technologies);Diagnostics (immunoassay diagnostics,blood screening,bedside testing and companion diagnostics);and Pharmaceuticals (branded generic medications for pervasive and persistent health conditions outside the US only).*
Abbott Labs recently acquired medical device maker St.Jude Medical for 25 billion dollars-its largest ever acquisition-on the desire to gain bargaining power with hospitals.The company paid a 2.67% dividend as of Friday.It scored a double beat on Q1 earnings.Earnings per share were 0.41 versus an estimate of 0.39;revenue was 4.9 billion dollars versus the 4.77 billion estimate. *
Abbott Laboratories (ABT)

How Tech Will Fare

Tech analyst Dan Niles of Neuberger Berman notes that the September-October sell-off caused some tech issues.There will be a lot of cutbacks.Numbers will have to be cut lower for 2009.A president can only do so much.We're in a down business cycle.You can't go out and buy every house on the market,Dan Niles remarked.

Consumers May Hurt Tech

Cautious consumers may hinder technology firms in the second half of the year,Dan Niles of Neuberger Berman thinks.Mr.Niles pointed out that housing prices are down 14% year over year,and homeowners won't be able to refinance.As well,the biggest impact of high oil prices hasn't been felt yet.Drivers are taking an extra hit of 450 billion dollars U.S..We don't know how consumer demand for tech products will be,Mr.Niles added.By early July,their tax rebate checks will be spent,so back to school and Christmas sales could be tough.He's constantly talking to Chief Information Officers,and they're ratcheting back their tech purchase plans.It is not a good picture right now.Nonetheless,he sees promise in selected firms,such as MEMC Electronic(WFR),which makes solar wafers;eBay(EBAY),as people are looking for bargains;and Apple(AAPL),which is launching a new iPhone.It's the most defensive in the portfolio Neuberger Berman has been for several years,Mr.Niles noted.