It doesn’t have to be sexy

It doesn’t have to be sexy

It seems like every day we hear about some new way cool whiz bang cloud enabled device that will revolutionize diabetes management. If it’s a not cloud enabled, this or cloud enabled that why even bother to pay attention. We do after all live in an interconnected world often times paying more attention to our smartphones than the people standing right next to us. The fact is investors, analysts, heck just about everyone love all these sexy way cool whiz bang cloud enabled stuff.

Then along comes Becton Dickinson (NYSE: BDX) who’s about as sexy as Donald Trump is politically correct. Although the company owns a boatload of very sexy intellectual property, their core competency what they are really good at is the boring stuff – syringes, lancets, pen needles and insulin pump infusion sets. Yep all the boring stuff that patients use every day or every three days and then needs another one.

To say that BD owns all the stuff that patients use to stick themselves is like saying Google owns the internet search category. Yes, they have competitors but no these competitors aren’t stealing any significant share. They are more of nuisance then a threat.

Is there core business in any serious danger; we don’t think so. The simple fact is even with all the way cool whiz bang cloud enabled stuff, payors prefer cheap and there is nothing cheaper than syringes. They may see fewer lancets sold in the future and perhaps less frequent changing of pen needles with all the longer acting therapies taking hold but the fact is patients will be sticking themselves for years to come and more than likely will be using a BD product to do it.

Now there was a time when this steady eddy of a company decided to take a walk on the wild side and enter the blood glucose monitoring market. A walk that didn’t turn out very well and taught the company it’s not nice to fool with Mother Nature. That better to stick with, yes the pun is very intended, their knitting and not go for any of this fancy stuff.

Has this strategy worked out for BD stakeholders? You bet as shares of BD are up over 14% on a YTD basis, up over 50% over the last 2 years and up over 118% the last five years. Listen we know lots of very sexy way cool whiz bang cloud enabled companies who would just die to deliver returns like that.

Listen we know this isn’t the sexy part of diabetes, that needles, syringes and lancets are pretty damn boring. And quite frankly this is exactly what BD wants everyone to think, as they are perfectly content to go about their business of printing money. They may occasionally wistfully think about taking another walk on the wild but so far these fantasies about expanding beyond their core competencies are just that fantasies.

Sometimes boring is not just good but very, very profitable.  It also helps that they are very good at what they do, well managed and thankfully staying away from what they are not good at.  BD may not be the sexiest company in diabetes but it’s one of the best.