E Lots More Than Aspirin: What You Should Know About Bayer

Xarelto is a Warfarin substitute, which was first introduced in 1948 as a rat poison. It is very easy to make a mistake dosing Warfarin which can kill and an overdose isn’t easy to detect early because internal bleeding can occur in the brain. With Xarelto dosing is much easier, resulting in less mistakes. But Xarelto can be deadly as well and unfortunately, it does not have an antidote which Warfarin does.

Bayer also owns big OTC pharma brands which are generally very attractive. Well known examples are Alka Seltzer, A+D, Aspirin and Aleve.

Source: Bayercare


The market is generally trading at highly elevated multiples. I’m interested in defensive and cheap businesses that are found off the beaten path. Bayer is one that piqued my interest. They don’t always get the best press and if they do get Monsanto that will not improve matters. However, hated stocks sometimes offer the opportunity to buy secure cash flows at the lowest of multiples. Bayer trades at what appears to be an indefensible discount to peers while both its seed and pharma business are defensive in nature. Something I value highly in the current environment.

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Disclosure: no positions in any stock mentioned

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