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Narrow-moat Bio-Rad beat our expectations once again in the fourth quarter, driven by growth in life sciences, an improved margin and further gains related to the Sartorius investment. While we may marginally increase our fair value estimate after incorporating full-year results for the firm and the impact of continued strong results from Sartorius, we continue to view shares as overvalued.
Bio-Rad Laboratories, headquartered in Hercules, California, develops, manufactures, and markets products and solutions for the clinical diagnostics and life sciences markets. In diagnostics (60% of sales), Bio-Rad manufactures, sells, and supports test systems and specialized quality controls for clinical laboratories. In life sciences (40% of sales), the firm develops and manufactures a range of instruments and reagents used in research, biopharmaceutical production, and food testing. The company is geographically diverse, with major markets in the United States (40% of 2019 sales), Europe (33%), and Asia (22%), with Canada and Latin America accounting for the bulk of the remaining 5%. Bio-Rad owns 37% of Sartorius AG, a laboratory and biopharmaceutical supplier.
