On December 31, 2024, Dodge & Cox executed a significant transaction by adding 5,779,100 shares of Baxter International Inc. (BAX, Financial) to its portfolio. This move increased the firm's position in the company by 12.96%, bringing its total holdings to 50,377,294 shares. The transaction reflects Dodge & Cox's strategic decision to bolster its investment in Baxter International, a company known for its diverse range of medical supplies and equipment. This acquisition is a testament to the firm's confidence in Baxter's long-term potential and aligns with its investment philosophy of seeking undervalued opportunities.

About Dodge & Cox

Founded in 1930 by Van Duyn Dodge and E. Morris Cox, Dodge & Cox is renowned for its team research approach in making investment decisions. The firm emphasizes long-term ownership of undervalued companies, steering clear of popular choices with high valuations. Dodge & Cox's investment philosophy is centered around a group decision-making process that enhances individual thinking and seeks superior relative value. The firm manages a substantial equity portfolio valued at $171.84 billion, with top holdings in companies like Fiserv Inc (FI, Financial), Johnson Controls International PLC (JCI, Financial), and Charles Schwab Corp (SCHW, Financial).

Overview of Baxter International Inc.

Baxter International Inc., based in the USA, is a prominent player in the medical devices and instruments industry. The company offers a wide array of medical supplies and equipment, including injectable therapies, nutritional products, and surgical sealants. Baxter expanded its portfolio by acquiring Hillrom in 2021, enhancing its offerings with hospital beds and patient monitoring tools. Recently, Baxter sold its kidney care tools in early 2025, focusing on its core segments: Healthcare Systems and Technologies, and Medical Products and Therapies. With a market capitalization of $15.63 billion and a current stock price of $30.62, Baxter is considered fairly valued with a [GF Value](https://www.gurufocus.com/term/gf-score/BAX) of $31.16.

Financial Metrics and Valuation

Baxter International Inc. is currently trading at a price to [GF Value](https://www.gurufocus.com/term/gf-score/BAX) ratio of 0.98, indicating a fair valuation. The company has shown a 5.01% gain since the transaction and a 4.65% year-to-date price change. Despite a low [GF Score](https://www.gurufocus.com/term/gf-score/BAX) of 65/100, Baxter boasts a strong [Profitability Rank](https://www.gurufocus.com/term/rank-profitability/BAX) of 7/10. However, its [Financial Strength](https://www.gurufocus.com/term/rank-balancesheet/BAX) is moderate with a rank of 4/10, and its [Operating Margin](https://www.gurufocus.com/term/operating-margin/BAX) growth has declined by 30.80% over the past three years.

Impact on Dodge & Cox's Portfolio

The acquisition of additional shares in Baxter International Inc. has increased Dodge & Cox's total holdings in the company to 50,377,294 shares. Baxter now represents 0.83% of the firm's portfolio and 9.90% of its holdings in the stock. This strategic move underscores Dodge & Cox's commitment to investing in undervalued companies with strong long-term prospects. The firm's top sector investments include healthcare and financial services, aligning with its focus on sectors with potential for capital appreciation.

Performance and Growth Indicators

Baxter International Inc. has demonstrated resilience with a 5.01% gain since the transaction. However, the company's [Growth Rank](https://www.gurufocus.com/term/rank-growth/BAX) is low at 2/10, and its [Momentum Rank](https://www.gurufocus.com/term/rank-momentum/BAX) is also at 2/10. Despite these challenges, Baxter's [Profitability Rank](https://www.gurufocus.com/term/rank-profitability/BAX) remains strong, indicating a solid foundation for future growth. The company's [Piotroski F-Score](https://www.gurufocus.com/term/fscore/BAX) is 5, suggesting moderate financial health.

Other Notable Investors

In addition to Dodge & Cox, other prominent investors in Baxter International Inc. include Richard Pzena (Trades, Portfolio), Bill Nygren (Trades, Portfolio), and Robert Olstein (Trades, Portfolio). These investors' involvement further highlights the company's appeal to value-oriented investment firms seeking long-term growth opportunities.

Conclusion

The addition of Baxter International Inc. shares by Dodge & Cox reflects the firm's confidence in the company's long-term potential. This transaction aligns with Dodge & Cox's investment philosophy of seeking superior relative value in undervalued companies. As Baxter continues to navigate the evolving healthcare landscape, its strategic initiatives and strong profitability position it well for future growth.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.