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Savings Experiment: Snow RemovalAmong other devices, Danaher makes electronic and environmental testing products, including devices that read bar codes.
Further, although analysts generally see low, single-digit revenue growth for FY2009, sales growth beyond that should be assisted by new and improved products, by the economic recovery, and via acquisitions. Analysts are also impressed by DHR's productivity improvements and cost-cutting efforts. The company's balance sheet is strong. The First Call FY2009/FY2010 EPS estimates for DHR are $3.43 to $3.66.
Technically, DHR's stock meandered near $50-55 for about six months, hence a Buy rating was delayed, but the stock has since cleared that hurdle, with a cushion, trading around $62. DHR's P/E is not cheap at 16, but given the company's growth prospects and position in the tech-oriented economy, it's reasonable.
Stock Analysis: Danaher is a moderate-risk stock. Consider buying a 25% position in DHR now; then buy another 25% in three months, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 50% of your DHR position in the first half of 2009. Sell/Stop Loss if you were to buy shares in this company: $32.
Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.
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