Are most of Waters customers among the Big Pharma companies or biotech?
No, most of them are Big Pharma. Biotech spending has declined so that has hurt. The large pharmaceutical companies are the majority of their business, but there is some consolidation going on in that sector right now. So there probably is going to be some consolidation of spending for R&D. I would think that the consolidation in the drug industry would be a difficult challenge for Waters. Why are you so bullish on the stock? Because of the valuation. Here I am able to buy a company with decent operating margins. They have a competitive advantage of constantly rolling out new products. If you can come up with a new device that allows a drug company to get a new drug out sooner than its competitors, you have to buy that equipment. It’s a profitable business which generates a lot of cash. And drug R&D spending isn’t going to decline. Thanks for your time. Source.
