Abbott Laboratories (ABT) is a drug and device medical company currently trading at 16 times its expected 2007 earnings of $2.82 per share. That is significantly below the 5-year average of 20.

The reason it is trading so low is multi-faceted but can in large part be blamed on the disappointing failures last year of prostate-cancer treatment drug Xinlay, and the heart-failure medication Simdax. Wall Street is also weary of medical stocks as the health care companies have lost 5% of their value in the past 5 years.

The reason many value investors are looking at Abbott Laboratories as a good buy right now is because of it’s recent acquisition of Guidant’s vascular-devise business. Purchased in April for $4.1 billion, the vascular division is producing $1.4 billion of this years estimated $22 billion in revenue and is expected double by 2009. It is also likely to boost Abbot’s earnings growth rate into the double digits from a current single digit performance.

Humira, the rheumatoid arthritis drug, is producing 12% of the profits and is going to grow bigger in the next several years. It’s competitive advantage is impressive; less dosing than Amgen’s Enbrel, and being injectable is more convenient than Johnson & Johnson’s Remicade.

With the prior disappointments already factored into the stock price, this $44 stock is poised to move upward. In the coming year it’s stock price could move upward to trade in the $54 range.