) hit an all-time high on July 1 with a price of $65.15, beating
its previous high of $64.80 attained on June 19, 2013. Total
shares traded on that date were 3,743,572 as compared to a
3-month average trade volume of 3,023,530. Danaher shares are
currently trading at $63.30 as of closing on July 1, reflecting a
year-to-date return of 13.2%.
Shares of this leading designer, manufacturer and supplier of
professional, medical, industrial and commercial products and
services have been showing steady growth momentum in the last
year. During the last 6 months, Danaher has hit 52-week highs 6
times. This shows a growing willingness in the market to own this
However, there are some underlying factors to remain cautious
about. Nevertheless, ably supported by a Zacks Rank #3 (Hold), we
believe it to be a worthy stock to hold and also look forward to
an even higher trend in the near term with the following factors
Factors to Consider
Recently in April, Danaher reported strong first quarter 2013
results with earnings of 75 cents a share from continuing
operations, representing a 2.5% growth from year-over-year
earnings. The company generated total sales of $4.4 billion in
the quarter, up 3% year over year. In the first quarter, Danaher
gained from the divestment of Apex Tool Group LLC joint venture
and other discrete tax benefits.
Danaher reported revenue growth across its five segments. The
company was able to achieve organic growth and margin expansion,
driven by Danaher Business System (DBS), which also helped in
timely cash flow generation. Operating cash flow for the quarter
was $636 million. Multiple accretive acquisitions over the past
few quarters were mostly responsible for fueling growth for the
Moving forward, Danaher is expected to further benefit from
multiple acquisitions made during the year. The company is also
deriving better-than-expected synergies from the merger of
Beckman Coulter. The company is also benefiting from product
innovations and go-to-market initiatives. Additionally, Danaher
also has a high positive growth expectation for earnings and
revenue as per the Zacks Consensus Estimate.
However, the company may face a sluggish growth due to
macroeconomic instability (high inflation and increased material
cost) prevailing in the European market. The current changes in
regulatory authorities of the U.S., which the company is subject
to, are likely to have an adverse impact on its overall
The company's acquisitions are also subject to integration
issues. Moreover, management lowered its 2013 EPS guidance range,
primarily due to the divesture of Apex Tool Group. This move has
also made us wary about the company's prospects and has blemished
an otherwise enterprising performance.
Other Stocks to Consider
Other sector participants performing well with a better Zacks
Rank include Carlisle
Honeywell International Inc.
), each having a Zacks Rank #2 (Buy).
CARLISLE COS IN (CSL): Free Stock Analysis
DANAHER CORP (DHR): Free Stock Analysis
HONEYWELL INTL (HON): Free Stock Analysis
ITT CORP (ITT): Free Stock Analysis Report
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