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BAX - Baxter International Inc.Week Ended: 3/17/01
Price 89.54 P/E Ratio 37.69 52 Week High 95.20
Last Week - 0.43 Earnings Date 04/26/01 52 Week Low 51.75
Picked At 92.61 Date Picked 3/1/01 Sector Healthcare
Activity
Current 89.54 Open 89.80 Change -0.51
Low 89.06 High 90.30 Volume 1,560,400

ZACKS | NEWS | PROFILE | HISTORICAL PRICES | OPTIONS | D-CHART
Company Description

BAX engages in the worldwide development, manfacture and distribution of products, systems and services used primarily in the health-care field. For the FY ended 12/31/00, revenues rose 8% to $6.90B. Net income from cont.ops. before acct. change fell 5% to $738M. Revenues reflect growth in the company%s I.V. Systems/Medical products and Renal segments. Net income was partially offset by the addition of in-process R&D and acquisition costs.

Play Description

March 1, 2001

Baxter International (BAX) has more to offer than meets the casual eye. Currently, the company is trying to become a biotech powerhouse. BAX plans on accomplishing this ambitious effort through peeling off its slow growing businesses and investing heavily in R&D. So far, the gamble is paying off. The company’s bioscience sales have more than tripled over the last few years to $2.5 billion. We also like the stock because the company's Board of Directors announced a 2:1 split of the stock, subject to a shareholder approved increase in the number of common shares the company is authorized to issue. Assuming the approval is received, the record date will be on May 9th 2001. On Thursday, BAX added $0.52 and came within $0.55 of hitting a new all time high. Looking at chart, we can’t help but notice the excellent set-up for a momentum breakout. However, we’ll look for resistance to come at the all time high of $93.16 and then at the $95 mark. Support comes in at the $91 mark, bolstered by the 5-dma of $91.10. Traders considering a position in BAX should look to time their entries when the stock breaches above resistance or recoils from support on strong volume of 900,000 shares traded by noon. We will set our stop at $89 to limit our downside risk.

Picked on March 1st @ $92.61
Change since picked 0.00
Stop Loss @ $89.00

Update

March 13, 2001

On Monday, the broad markets sold off sharply with both the Dow Jones Industrial Average (INDU) and the NASDAQ Composite Index (COMPX) down triple digits. During this flood of selling, BAX fell #3.32 to close at $90.25. From this level, it didn’t take much of a fall to hit our stop of $89, which is exactly what happened in today’s trading.

Picked on March 1st @ $92.61
Profit/Loss = -3.61 (-4%) (Stopped out Tuesday @ $89.00)
Best Profit = +2.59 (+3%)

March 11, 2001

Simply put, Baxter’s goal is to double its total annual revenues within ten years on the back of genetically engineered products. To attain this ambitious agenda, the company has hired scientists from established firms like Novaritis and Aventis. Baxter has already tripled its manufacturing capacity in Thousand Oaks, Calif. to help prepare for future production needs. Despite a pullback in the AMEX Biotechnology Index (BTK.X), which lost 2.49% on Friday, BAX managed to eke out a gain of $0.18 to close at $92.90. This contrary relationship to the index has been a re-occurring event during the course of our play, and could be a good indication of BAX’s strength. The stock’s one-month performance against the index is notable, with a 6% gain versus a 10% loss. So, should upward momentum in the stock continue we’ll look for resistance to come in at $95, followed by a more notable barrier at the century mark. Support will come at the $90 mark (recent low), bolstered by the 30-dma of $89.70. Low risk entry points may present themselves with a bounce off support on volume of at least 900,000 shares by mid-day or a breach through resistance on similar mid-day volume. We’ll continue to keep stops at $89.00 to guard against a pullback.

Picked on March 1st @ $92.61
Change since picked +0.29
Stop Loss @ $89.00

 


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