I am not sure that blood products is a mature business. As the...

I am not sure that blood products is a mature business. As the population ages in the West and Asia moves to becoming middle class, the demand for CSL's products is likely to continue to grow.

Also, the barriers to entry for any new player is now so costly with all the regulations and processes to go through, that threats from that quarter are small or non-existent. This gives the companies that are in the market some pricing power.

The market CSL is in, is almost "recession proof". People's normal behaviour is to cut back spending on health as one of the very last items, so there is significant stability to the earnings side of the business, irrespective of the economic climate. Hence the classification of the stock as defensive.

With CSL spending $1m per day every day of the year on R & D, the pipeline of new products with increased margins (provided they are accepted by the regulators) will continue to provide upward movements in earnings.

Combine the above with a management team that, IMO, is second to none. A balance sheet that is in excellent shape, cash flows that are phenomenal, selling margins that only RIO and BHP can beat on their I Ore mines and you have a company that ticks all the boxes for a stock that should carry a significant p/e premium.

The market CSL is in, though, carries significant risk. If it has an adverse ruling, it can be stopped in it's tracks overnight. This should be considered before buying the stock.

If you think that the stock is over priced, look at a 10 year chart of the share price. It does not have the gyrations of some other stocks. Every time I think CSL is overpriced, it surprises me and holds it's position or continues to rise.

HT1