r/valueinvesting
Boston Scientific (BSX)?
Author finds BSX interesting at current depressed prices despite its massive $14.5B Penumbra acquisition and $2B ASR.
- Stock price dropped 50% from January levels, presenting a potential value opportunity.
- Strong capital allocation: executing a massive $14.5B acquisition while simultaneously running a $2B ASR.
- Lacks a dividend, which is a drawback for traditional value investors.
Thoughts on BSX? I normally prefer value stocks with a dividend (no dividend here), but I still find this very interesting at present price.
The last Value Line review (5/8/26) it was at $60. Boston completed 80% of a $2B ASR (accelerated share repurchase) 5/18/26 about $53/share. Now its $44.20, 50% below the level in January when they announced the $14.5B acquisition of Penumbra (PEN).
That's pretty strong stuff, announcing a $14.5B (mostly cash) acquisition, then a $2B ASR while the acquisition is pending.
Penumbra acquisition announcement 1/15/26:
ASR announcement 5/18/26:
i bought in at $46, apparently the company is ran wonderfully and the employees are happy. to me that’s a big sign of future success. They are not underpriced by any means but they have a large market share in afib devices. watchman sales under performed so that’s why the stock tanked. it was heavily reliant on watchman and still is. still a great company so i bought in
it’s because watchman was expected to blow earnings out of the water. still had a good beat, but not what the price factored in
By the way ABT looks good too at this price level. At least you're getting a dividend there.
Agreed, 4 years of long term debt to yearly earnings is a pass for me. 7.5% ROIC is low too. Although the price is not terrible at the moment.
BSX is due for a layoff in a couple month as they do every year.
Although they just built a massive building not far from me.
Really? What roles do these layoffs normally affect?
I am not a doctor but work in healthcare. The doctors are not comfortable using BSX's devices for any heart related stuff. The equipments are complex and unreliable they say.
I have only talked to 2 of them so my data is not the general consensus but enough to make me stay away from BSX.
This is surprising based on my own research. Do you mind sharing whether the doctors were from the same hospital or perhaps geographic details? My own understanding echoes u/Compound30 comment about preference for the market leader based on various reasons, including risk aversion (hard to fault someone for using the market leader).
Better talk to a few more because I believe BSX may be the #1 market leader in drug-eluding heart stents. Doctors tend to use the brand they are trained on and that might be hospital dependent.
Yeah, I need to. The feeling I got was that BSX is kind of the the only proven player in this so there's not much competition. But lately they have had some not so amazing products and it takes a lot of R&D to work on and launch new products. So kind of like they are in a bad phase but if you believe they are gonna be back with better products then it's a solid investment.
Anyways, I'll update when I have more data to back myself.
Why are you using forward numbers in such an uncertain economic environment. It's currently 18 P/FCF. We don't know what the growth will be like 12 months from now.
But looks like your reply is AI generated.
Why wouldn't I use forward numbers? we can come up with an estimate of what growth may look like based on what management is signalling. Using just past figures in my analysis suggests that its all priced in... so I use forward numbers. Trailing P/E is 18.51 https://finance.yahoo.com/quote/BSX/key-statistics/
Not AI, just tried to give a detailed analysis.
Surely you jest? Forward numbers, and estimates of, is the name of the game.
I bought uhs over bsx
only minimally. more disappointed dudnt even get a small win