Bought MDT

If you are a first timer, please read the following pieces first. It will provide you with important background information.
1. Why I created this blog?
2. How am I going to operate this blog?

I am not standing still. Besides buying a condo, I bought and sold a series securities. One of the most notable ones is the new purchase of 500 shares of Medtronic (NYSE: MDT) at $33.37 paying $7.95 commission on October 11.

MDT is serving more than 7 million people annually with over 40, 000 employees. From 2006 to 2010, its revenue increased about 40%, per share dividend more than doubled, diluted EPS increased 35% and shares outstanding reduced by 10%. And yet, it is trading at a range of high 40s to high 50s in 2006. Right now, it is changed hands at low 30s.

During the market weakness, MDT bought a lot of businesses. In the last year, it acquired INVATER, COREVALVE and VENTOR. Those acquisitions eliminated competitors at a good price, leveraged its global footprint and created natural synergy.
For 2011, the company expects to earn $3.4 per share. It raised debt under the unusually low interest rate environment and used the money to make more acquisitions. It is in a triopoly market mostly avoiding price competition. People can perhaps postpone the medical device operation because of the bad economic situation but can’t avoid it. The postponed sales will come back in the following years. And with more entrenched position, MDT is going to capture more of the sales. Once the growth comes back, I can reasonably believe the multiple may expand. While waiting, the stock is paying 2.6% dividend.

If in 5 years, the economy comes back to life, MDT will make about $5 per share. It may have 100% upside. Therefore, if the market continues to treat MDT without respect, I may add to my positions.

A small ad

If you are a first timer, please read the following pieces first. It will provide you with important background information.
1. Why I created this blog?
2. How am I going to operate this blog?

It has been a while since I last updated my blog. Apologies to my regular readers! Buying and operating rental properties take a lot of time. But I am not standing still. I updated my old condo and rent it with a positive cash flow. I also rented one room of my newly acquired condo. Currently, two rooms are rented while I am occupying the third room. Operating rentals are continuous efforts. I now have one renter to move out (after fulfilling his one year lease) early next month. Shamelessly, I am putting a little ad for my room.

Here is my Craigslist ad:
http://columbus.craigslist.org/roo/2073193317.html

Roommate Wanted Available on Dec 6, 2010

Call 614-716-8325 Tom

One room in a 3 bedroom/1.5 Bath Condo for Only 359/m Best Value in
Worthington/Polaris

The place is freshly painted and cleaned

You are going to share with two quiet and clean guys

Total 1222 Sqft + 200 Sqft finished basement and spacious storage room

Close to everywhere, convenient

Walking distance to: Worthington Elementary School, dentist, urgent
care and parks;

3 minutes to library, Kroger and Laundry

5 minutes drive to shopping and large employers: Costco, Polaris Mall,
Chase, United Healthcare and more;

15 minutes drive to: Ohio State University, Otterbein College

Your share of utility bills include only gas and electricity. Water
and condo fee are paid by us $35 application fee and one month rent as
security deposit

7894 Woodhouse Ln Worthington OH 43085