Wednesday, September 18, 2013

Seeking Alpha: Bio-Rad Built For Consistency, Not Short-Term Out-Performance

Within the life sciences and clinical diagnostics worlds, Bio-Rad (BIO) is an odd duck. More like Techne (TECH) than Illumina (ILMN), Cepheid (CPHD), or even Thermo Fisher (TMO), Bio-Rad isn't looking to redefine its markets or change the game. Instead, this is a company that lets others be the first-movers and focuses on leveraging its large global distribution system and driving consistent, dependable financial results.

That's all well and good when the stock is priced that way. Unfortunately, Bio-Rad is often picked as an undervalued "hidden gem" in the life sciences/diagnostics space on the basis of its EV/EBITDA or EV/rev ratio, but without the acknowledgment of the differences in the models. None of this is to say that Bio-Rad is a bad company - trailing growth rates of 8% to 16% for revenue, free cash flow, and book value per share are quite good - but I do think investors have to be careful about the extent to which they goose their growth rates when considering the shares' fair value.

Please click the link to read the full article:
Bio-Rad Built For Consistency, Not Short-Term Out-Performance

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