) reached a 52-week high of $77.01 on Wednesday, Dec 18, 2013.
However, the stock closed at $74.76, representing a one-year
return of about 38.1% and a decent year-to-date return of roughly
34%. Average volume of shares traded over the last three months
stands at approximately 2,475,140.
Danaher expects to benefit from multiple acquisitions made
during the year. The company continues to invest in research and
development (R&D) to drive product development and expansion.
In the third quarter, Danaher also launched a couple of new
diagnostic equipments, which are likely to contribute to the
company's revenues, going forward. Further, organic growth and
margin expansion of the company is facilitated by its DBS system
(Danaher Business System).
Danaher delivered positive earnings surprises in the last two
of the four quarters with an average beat of 0.74%. This Zacks
Rank #3 (Hold) company has a market cap of $53.6 billion and a
long-term expected earnings growth rate of 12.2%.
The company follows an aggressive acquisition strategy and is
on a constant lookout for business that strategically fits its
existing business portfolio and also helps expansion and
diversification into new and attractive business avenues. The
recent acquisitions of companies like Packetloop, Teletrac and
CAPE Systems are expected to enhance DHR's product development
chain as well as customer experience. The company's acquisition
of Videojet in 2002 proved to be one of the most important
strategic moves by the company. At present, Videojet is the
leader of the coding, marking and printing market that is valued
at $4 billion and is expected to grow over 4%-6% in the long
Danaher is gradually evolving as a healthcare company. It has
broadened its presence in the healthcare and dental markets which
are expected to grow in the long-term owing to the rise in aging
population and increased spending on healthcare and fitness. Aged
population is believed to be one of the fastest-growing age
groups over the next couple of decades and therefore we believe
this will lead to a rising demand for health care products and
services in Danaher's Dental and Life Science & Diagnostic
businesses. In the latest reported quarter (third quarter of
2013), approximately 36% of revenues were derived from Life
Sciences & Diagnostics and Dental segments.
Apart from this, the company has strategically diversified its
business geographically and expects to witness robust growth in
diverse economies including Japan, China, and Western Europe.
More than half of Danaher's revenues come from outside the U.S
with approximately 25% of the revenues generated from China.
While the U.S. markets are forecasted to grow at the rate of
2%-4%, emerging markets like India and China have the potential
to grow twice as much. In the third quarter of 2013, most of
Danaher's businesses, except the industrial businesses, saw
improvements in China.
Improved 3Q13 Earnings
reported net income of $597.0 million or 84 cents per share in
the third quarter of 2013 compared with $548.7 million or 77
cents in the year-ago quarter. The reported earnings marginally
beat the Zacks Consensus Estimate by a penny.
The healthy rise in earnings was mainly attributable to core
revenue growth and margin expansion. Specific initiatives for new
product development and increased investment were also positive
drivers for the company. In addition, most of its segments,
barring the Environmental and Test & Measurement segment,
reported a decent improvement in revenues year over year.
Danaher generated total sales of $4.7 billion in the quarter,
up 5.5% year over year. Core revenues for the quarter climbed 3%
year over year, while revenues from acquisitions were up 3.0%,
partially offset by adverse currency translation effects of
0.5%. The reported revenues exceeded the Zacks Consensus
Estimate of $4.6 billion by 2.1%.
Over the last 60 days, 1 of the 17 estimates and 2 of the 13
Estimates for 2014 and 2015, respectively, were revised upward.
However, the Zacks Consensus Estimate was stagnant at $3.41 per
share for 2014, and declined 1.3% to $3.76 for 2015.
Other Stocks to Consider
Danaher currently has a Zacks Rank #3 (Hold). Investors
interested in the Diversified companies sector could consider
Hutchison Whampoa Limited
). All three carry a Zacks Rank #2 (Buy).
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