Alcon Inc.

The views expressed below are those of Anchor Capital Advisors, LLC (“Anchor”) as of the date written and are subject to change at any time. They are based on our proprietary research of the stated company and the following is a summary of the primary factors that support our beliefs and rationale for investing in the company. Please see additional disclosures at the end of this publication.

ALC: NYSE

Alcon Inc. engages in the development, manufacturing, and marketing of surgical equipment, eye drops, and consumer vision care products to treat eye diseases and disorders.[1] The company was founded in 1945, and is headquartered in Hünenberg, Switzerland.[2]

Investment thesis

In our opinion, Alcon is a leader in the eye care space, with secular tailwinds. We believe Alcon is an innovator, with a commitment to R&D, and has dominance in surgical products. As stated below the company plays in an oligopoly.

Confirmation through research

Alcon operates in the $23 billion ophthalmic surgical and vision care market.[3] With the world population growing and aging, the need for quality eye care is expanding and evolving.[4] Further, there are 20 million people blind from treatable cataracts, 1.7 billion suffering from presbyopia, and over 1 billion people living with some form of visual impairment.[5] The company is committed to innovation, as can be seen by having over 1,200 employees in R&D.[6] Alcon plays in an oligopoly in contact lenses/eye care with JNJ, Cooper Vision, and Bausch Health.[7] They have dominance in surgical products, with 56% share in Phacoemulsification products (a surgical product used for the removal of natural lens for replacement with new lens’).[8]

Variant Perception

We don’t believe the market is assigning fair value to the business considering the backdrop, scale, focus on improvements, margin expansion, and opportunity to take the growing free cash flow and put it into dividends and share repurchases.