I've had Bayer (BAYRY) on a watch list I have listing many companies that I would consider owning at reasonable valuations. Those who follow the markets will know that Bayer has captured some headlines in recent years. First, the company announced some time back that it would be acquiring Monsanto and the $63 billion transaction was completed in recently weeks. However, just before the transaction was closed, the company found itself in the headlines again as result of California court awarding a plaintiff $289 million who had sued Monsanto, claiming that the company's herbicide had helped cause the plaintiff's cancer. What's more, Bayer recently revised its guidance for 2018 downward by about (~7%), which results in a forward P/E multiple of 12.7 (resulting in an earnings yield of 7.87%). With all this relatively bad news, one may think "what the heck are you doing investing your precious capital in this company?". Well, in short, I think the long terms benefits greatly outweigh the near term risks. I'll have additional commentary below, but before I get there, let's take a look at some of the basic metrics I typically review in consideration of a stock purchase.
