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General Investing

C.R. Bard, Inc. (BCR) Generates ROE in the 20s; Trades at 7% Free Cash Flow Yield

May 16, 2013

C.R. Bard, Inc. (BCR) is generating solid returns on equity and consistent free cash flow, in addition to being awarded several hundred million dollars from a patent infringement lawsuit against W.L. Gore & Associates, Inc., making BCR a valuable investment, says Mark W. Oelschlager, Portfolio Manager at Oak Associates, Ltd.

“One of our big holdings is CR Bard (BCR)…we’re talking about a company that generates returns on equity well into the 20s; consistent free cash flow; it’s trading at about a 7% free cash flow yield, whether you take the most recent year’s results or the last four years; and it is one of the leaders in its field,” Oelschlager said.

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BCR is an uncommon value, as it is a dominant company with strong financial metrics that is trading at a cheap valuation, and the stock is also not reflecting the company’s recent award from a patent infringement lawsuit, Oelschlager says.

“A kicker to the story there is that they recently won a lawsuit against Gore for patent infringement, and they are being awarded several hundred million dollars. Gore is appealing, but that’s a big chunk of change that should be coming Bard’s way, and it really doesn’t seem to be reflected in the stock at all,” Oelschlager said.


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