Danaher: The Right Stock for the Bar Code Age

A strong balance sheet, good cost containment, and productivity increases supplements a business model that's done an excellent job rolling-out innovative products in a timely manner.

The First Call FY2010/FY2011 EPS estimates for DHR are $4.08 to $4.63. Each EPS estimate looks slightly low, according to my analysis.

Technically, Danaher's stock, uptrending for about a year, swooned in-sync with the Dow's late January/early February correction, but has since popped back above the key, 50-day moving average. The latter is a sign that institutional investors (IIs) took advantage of the dip to establish/add to DHR positions.

2010 Outlook: I view Danaher as a long-term play, but if investors are looking to sell DHR within the year, it's probably best to take your profits after it rises to $82-84, if it fails to rise above $85.

Stock Analysis: I consider Danaher to be a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, and I liked it, I'd 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, I wouldn't buy more than 75% of my DHR position before April 2010 and I'd put a sell/stop loss at: $32.

- -

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