Becton, Dickinson And Company - I Have Added To My Position

2/18/20

By Charles Fournier, SeekingAlpha

Summary

  • Investors with a long-term investment time horizon should welcome instances when great companies experience short-term challenges.
  • Becton, Dickinson and Company recently released Q1 results and lowered FY2020 guidance as a result of the Alaris pump issue.
  • Embrace periods in which a great company’s share price gets hammered because of short-term challenges.
  • Becton, Dickinson and Company’s share price has jumped subsequent to the pullback following the release of Q1 results. I think investors can realistically expect another share price pullback and would be wise to practice patience.

Introduction

I initiated a position in Becton, Dickinson and Company (BDX) in February 2009 in an account for which I do not disclose details. Over time, I have been reinvesting the quarterly dividends and have occasionally added to my position on weakness.

I like BDX’s long-term prospects, and in my November 6, 2019 article, I indicated that I initiated a BDX position in one of the side accounts within the FFJ Portfolio at a cost of $248.655/share.

Following that purchase, BDX’s share price appreciated to ~$286 just prior to the release of Q1 2020 results on February 6th, the first day of our vacation in Costa Rica; BDX’s share price plunged to the ~$247 level when Q1 results were released.

I have a long-term positive outlook on BDX so my interest is piqued when I see a plunge in BDX’s share price. I, therefore, set aside some very valuable time from our vacation to delve into the Q1 analyst conference call.

While management readily admits it is experiencing short-term headwinds, the long-term outlook remains positive. As a result, I viewed the share price pullback as an opportunity to increase my exposure and acquired:

  • An additional 200 shares for the FFJ Portfolio
  • Additional shares in the account which has held BDX shares since 2009

Full disclosure: The average purchase price of the recently acquired shares was ~$249; I will update the FFJ Portfolio at month end to reflect the acquisition of these additional 200 shares.

Regrettably, BDX share price has appreciated to $260.22 level as at the February 14, 2020, but this is earliest I could write/publish this article to disclose my most recent purchases.

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