Consider Danaher, because it's a bar code world

Posted Dec 7th 2009 5:00PM by Joseph Lazzaro
Filed under: Stocks to Buy

A good trend for investors to get behind: the bar code/scanning/smart instrument trend, which is why I'm reiterating my buy rating for Danaher Corp (DHR), first recommended on June 4, 2009 at a price of $62.95. If you bought DHR in June, you're up about 15%

As expected, Danaher, a maker of electronic and environmental testing products, including devices that read bar codes, has been trending up for a good reason. The company is on-track to report a double-digit increase in revenue in 2010 following a likely 10% revenue decline in 2009, and institutional investors (IIs) have been bidding-up shares throughout 2009.

To be sure, with a a P/E of about 20, DHR is not as cheap as it was in June, but considerable upside remains; still, this may the last chance to buy a stake in DHR and earn an outsized gain during the current economic expansion. Look for an $85-90 price for DHR by the end of 2010.

The First Call FY2009/FY2010 EPS estimates for DHR are $3.46 to $3.90.

Technically, Danaher's stock chart is strong -- an uptrend, and one where the price remains above the key, 50-day moving average -- a sign that institutional investors (IIs) are establishing/adding to positions.

Stock Analysis: Danaher Corp is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in DHR now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your DHR position before February 2010. Sell/Stop Loss if you were to buy shares in this company: $32.

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Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

Tags: bar code, BarCode, barcode scanning, barcodes, BarcodeScanning, danaher, electronics, environmental testing, EnvironmentalTesting