Company Description
Bausch & Lomb is the eye health company, dedicated to perfecting
vision and enhancing life for consumers around the world. Its
core businesses include soft and rigid gas permeable contact
lenses and lens care products, and ophthalmic surgical and
pharmaceutical products. The Bausch & Lomb name is one of the
best known and most respected healthcare brands in the world.
Celebrating its 150th anniversary, the Company is headquartered
in Rochester, New York. Bausch & Lomb's 2003 revenues were $2.0
billion; it employs approximately 11,500 people worldwide and its
products are available in more than 100 countries. More
information about the Company can be found on the Bausch & Lomb
Web site at www.bausch.com. Copyright Bausch & Lomb.
[Source: Company Press Release]
Reasons to Invest:
Is January already over? Man time flies in a bull market. With only a few days left until February, it can only mean one thing... its Super Bowl Weekend. Okay, so maybe I am not to excited for this year's Super Bowl match up, but one thing is certain... I am excited about this week's Drip of the Week!
Bausch & Lomb, Inc (NYSE:BOL) looks fundamentally solid as well
as technically sound, however I am going to use a trigger on this
Drip plan (more on this in a bit). Revenues were up 11% last
year, to $2.02 billion. More impressively, their net income grew
by a margin of 74% after an accounting change. The company noted
that the huge rise in their sales and income reflect an increase
in contact lens, lens care and pharmaceutical sales, as well as
the absence of a $49 million restructuring charge and asset
write-offs.
The company also has a few financial highlights worth mentioning.
Their revenue growth was recorded at being 6.10 percent, with a
gross profit of 1.02 billion. BOL's earnings growth for the past
fiscal year was a whopping 242.00 percent, with diluted earnings
per share of 2.359.
According to their Price History statistics, Bausch & Lomb
reported a 52-week change of 61.32 percent, which is 20.14
percent relative to the S&P 500. These numbers are quite
impressive, when you consider that nothing was reported in the
red last year.
On top of that, BOL has been in an up trend regression channel
since February of 2003, adding on more than 20 points since its
2003 low of 29.35. From a technical standpoint, BOL has far more
than impressed me, especially when you consider the stocks
performance in 2002. Furthermore, the point and figure chart
indicates that BOL is on an ascending Triple Top Breakout, with a
price target of 59.00.
Over the past four weeks BOL's price performance has been ranked
in the top 25 percent of its industry. Yesterday (January 29th)
BOL announced that they had raised their 2004 earnings per share
projections to the range of $2.60-$2.65. They also said that
they expect year-on-year growth of approximately 15% over each of
their 2003 quarters. Bausch and Lomb cited strong constant-
currency revenue growth as the primary reason for their positive
outlook.
While contact sales were up for BOL last year, so were the
numbers of LASIK surgeries. Well, what does corrective eye
surgery do to a retailer of contacts? Would you not think that
with the increase of eye surgeries, that there would be a
decrease in corrective lens sales? This could be true, but it's
not holding backing BOL's growth, because on December 22nd, 2003
the LASIK Vision Institute announced that they had decided to
make Bausch & Lomb's Bausch & Lomb Technolas laser their
preferred lasers in their LASIK centers across the United States.
I think this is a genius way to get a handle on corrective eye
surgery. If they can't sell you lenses, why not still make money
on the surgery?
BOL has an average dividend yield of 0.99 percent, which
calculates out to an annual dividend of $0.52 per share owned.
All the signs say that BOL is definitely on a bullish trend
higher, but one thing still concerns me. That one thing is the
54 level. Fifty-four has served as long term resistance for the
stock since September of 2000. This is where the trigger comes
into play and where I would like to see a few things happen
before I actually add the play to my portfolio. I would like to
see a retest of the top of BOL's February regression channel,
which is right around 56. If the stock can break out over its 3-
year resistance level, this is the first indication that we may
be in for a ride to its 2000 highs (over 80). We'll call a
breakout to 56 the first set of criteria. The second would then
be a retest of 54. I would like to see 54 hold up as support for
at least a week. If the stock continues to close over 54 (which
would be the middle support bar of the regression channel) then
this is a good indication that old resistance of 54 has turned
into new support for the stock. If both of these two things
happen, I would be intrigued to add the stock to my portfolio and
to ride it back up to 80 (which I would expect to be hit over the
next few years).
This ends another exciting episode of the DripAdvisor.com Drip of
the Week. Stay tuned next week, as we will spotlight another
stock worthy of the DripAdvisor.com limelight.
Until Next Week,
Nich Sheldon
Editor
Broker Recommendations
Strong Buy 3
Buy 1
Hold 7
Sell 2
Strong Sell 1
Brokers Covering 14
DRIP Information:
Shares to Qualify = 1
Auto-reinvestment = Yes
Accept Foreign Accounts: Yes
Temper Enrollment: Yes
Min/Max Investment = $25-$500,000/Year
Reinvestment Fees -
Dividend investment fees: 0
Cash investment fees: 0
Auto reinvestment fees: $1
Transfer Agent:
First Chicago Trust
800-328-9033
Corporate Headquarters:
One Bausch & Lomb Place
Rochester, NY 14604
Phone: (585) 338-6000
Fax: (585) 338-6007
