Abbott Laboratories (ABT): Supercharge Your ETF Portfolio

Abbott Labs is one of the stocks I used as an example of how one might supercharge a portfolio made up of non-managed index ETFs.  What is the outlook for ABT when analyzed in isolation?  Platinum members will find such an analysis below.  I am using Better Investing’s Stock Selection Guide for this analysis and the data comes from the American Association of Individual Investors (AAII).

Several decisions or estimates are required to come up with a Buy, Hold, or Sell decision.  1) The reviewer needs to project future sales.  I tend to be conservative with my estimates.  This is no place to become overly optimistic and push higher sales, particularly in this market environment.  2) Projecting future earnings is the second decision.  In general, I project earnings to be a bit lower than sales as it is not logical to think earnings, over the long run, will grow at a faster rate than sales. 3) The third projection is one of estimating the high price/earnings ratio.  Once more, I tend to go with a figure that is below the recent few quarters just to be on the safe side.  Even so, ABT is higher than what seems like a good buying opportunity.  4) The fourth decision requires one to come up with a future low P/E ratio.  I am projecting this to be 15, or still plenty high.  5) The last decision requires the reviewer to come up with a future low price.  I am setting this at $47.9 or a significant drop below the current price of $65.7.

Here is page one of the analysis.  Two of the five projections occur on this page.

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Supercharging Portfolio With Low Beta Stocks

In response to recent discussions surrounding Geoff Considine’s article, “Why Low Beta Stocks Are Worth a Look,” I put together a simple portfolio made up of several ETFs found in many of the ITA Wealth Management portfolios.  I added two low volatility ETFs, SPLV and USMV.  These are new ETFs requiring a shorter time frame in the following QPP analysis.

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