The shares of bar code giant Danaher Corp. (DHR), first discussed here on June 4, 2009 at a split-adjusted price of $31.48, continue to move north, and I obviously still like the business model at this stage.

Currently trading at/near $51, now would be a good time to consider taking some profits off the table with DHR. Those investors who can tolerate the risk can maintain their full position to go for an even larger gain.

Danaher will likely post 2011 revenue growth of 10-12%, followed by another impressive revenue rise in 2012, boosted by acquisitions and a strong international performance.

Beckman Coulter (BEC) and Danaher (DHR) announced that they have entered into a definitive merger agreement under which Danaher will acquire all of Beckman Coulter's outstanding common stock for $83.50 per share in cash. Overall option implied volatility of 24 is below its 26-week average of 30, according to Track Data, suggesting decreasing price movement.

Pride (PDE) stockholders will receive 0.4778 newly issued shares of Ensco (ESV), plus $15.60 in cash for each share of Pride common stock. Pride overall option implied volatility of 40 is below its 26-week average of 43, according to Track Data, suggesting decreasing price movement.

Options Update is by Stock Specialist Paul Foster of theflyonthewall.com.

Betting on the outcome of a buyout is no easy feat. Will there be a heated auction? Or will the bidders have doubts and want price concessions?

The result is often much volatility. Just look at Beckman Coulter (BEC), a top medical diagnostic instruments company. In early December, the company put itself up for sale and the stock price surged to $72. Since then, the shares have traded in band of $71 to $75.

Analyst upgrades:

• Citigroup upgraded Lubrizol (LZ) to Hold from Sell following the company's analyst day citing its continued pricing power in lubricants. Citi upped its target price for shares to $115 from $82.
• Janney Montgomery upgraded Viacom (VIA) to Buy from Neutral citing the company's ratings improvement, 2011 film slate, and video game pipeline. The firm has a $45 price target for shares.
• BMO Capital resumed coverage on Gammon Gold (GRS) with an Outperform from a Market Perform following the its equity issue. The firm has a $12.50 price target on the stock.
• Comerica (CMA) and First Horizon (FHN) were upgraded to Buy from Hold at Deutsche Bank.
• Prudential (PRU) was upgraded to Equal Weight from Underweight at Barclays.
• Itron (ITRI) was upgraded to Hold from Sell at Stifel Nicolaus.

Bar code giant Danaher Corp. (DHR), first discussed here on June 4, 2009 at a split-adjusted price of $31.48, formed a double-bottom this summer, and I obviously still like the shares here.

Look for Danaher to post 2010 revenue growth of 12-15%. Danaher makes electronic and environmental testing products, including devices that read bar codes.

A strong balance sheet, good cost containment, and productivity increases supplement a business model that's done an excellent job rolling-out innovative products in a timely manner. Further, there's ample room for market share gains.

Analyst Upgrades

• Citigroup assumed coverage of Illinois Tool Works (ITW) and upgraded shares to buy from hold with a $52 price target. Citi cites valuation and the company's successful execution for the rating change.
• UBS upgraded Rowan Companies (RDC) to buy from neutral based on better-than-expected dayrates in the high specification jack-up market. The firm raised its price target to $42 from $28.
• UBS also upgraded NetLogic (NETL) to buy from neutral and keeps a $33.50 target on the stock. The firm upgraded shares based on valuation and solid long-term outlook.
• AvalonBay (AVB) and BRE Properties (BRE) were upgraded to neutral from underperform at Macquarie.
• Covance (CVD) was upgraded to equal weight from underweight at Morgan Stanley.
• Reynolds American (RAI) was upgraded to neutral from underperform at BofA/Merrill.

I first discussed Danaher Corp. (DHR) here on June 4, 2009, at a price of $62.95, and shares of bar code giant have pulled back recently, but view the retreat as a decent entry point. Here's why.

Danaher, maker of electronic and environmental testing products, including devices that read bar codes, has been in a year-long up trend for a good reason. The company is on-track to report a near-double-digit increase in revenue in 2010.

Analyst Upgrades

• Oppenheimer upgraded ConocoPhillips (COP) to outperform from perform after the company sold its stake in Syncrude. The firm has a $70 price target for shares.
• Leerink upgraded UnitedHealth (UNH) to outperform from market perform. The firm sees upside to the company's 2010 guidance and finds shares attractively valued at currently levels.
• Citigroup upgraded both Mirant (MIR) and RRI Energy (RRI) to hold from sell after the two companies agreed to merge.
• Cooper Companies (COO) was upgraded to outperform from market perform at FBR Capital.
• Expedia (EXPE) was upgraded to conviction buy from neutral at Goldman.
• A123 Systems (AONE) was upgraded to buy from hold at Deutsche Bank.

3M Company (MMM) benefited from a comment from brokerage Morgan Stanley. The brokerage house believes that 3M will rally after an optimistic forecast from Danaher (DHR), which operates in many of the same markets as 3M. The broker believes that the stock will enjoy a nice 30-day run thanks to DHR's forecast.

The thing is, if the stock continues the performance it started in early 2009 -- we shouldn't need a brokerage to tell us that the stock will do well during the next 30 days. Shares of 3M have advanced along the double-barreled support of its 10- and 20-month trendlines. The last time the equity finished a week below both of these trendlines was more than a year ago.

Danaher Corp (DHR), first discussed here on June 4, 2009 at a price of $62.95, is still on my radar screen for future gains. Here's why:

Danaher, maker 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 near-double-digit increase in revenue in 2010.

There are trends you ignore and trends investors should not ignore. And one investors should not ignore is the bar code trend. Trend? It's becoming a world of bar codes.

And with the above in mind, I'm reiterating my Buy rating for Danaher Corp. (NYSE: DHR), first recommended on June 4, 2009, at a price of $62.95.

Danaher (NYSE: DHR - option chain) shares are rising today after the company agreed to purchase AB Sciex from MDS Inc. (NYSE: MDZ) and Life Technologies (NASDAQ: LIFE) for a combined $1.1 billion. DHR also announced more details of its restructuring, doubling the number of jobs eliminated.

If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on DHR.

If you've ever scanned a product or otherwise use a bar code, then you know the value in Danaher Corp. (NYSE: DHR).

Among 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.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Amazon.com Inc. (NASDAQ: AMZN) shares surged after earnings easily topped Q4 expectations.
• AT&T Inc. (NYSE: T) reported that its Q4 earnings fell while its revenue rose marginally.
• Boeing Co. (NYSE: BA) posted a big loss and lower revenue due to strikes and design changes.
• Caterpillar Inc. (NYSE: CAT) reported that Q4 profit fell despite higher revenue and lowered its guidance.
• Danaher Corp. (NYSE: DHR) lower Q4 profit topped analysts' estimates, sending shares higher.
• Eastman Kodak Co. (NYSE: EK) reported a Q4 net loss and announced additional job cuts.

Danaher (NYSE: DHR - option chain) shares have moved higher today after the company said its fourth-quarter profit fell 4.5 percent to $305.7 million, or 92 cents per share, on revenue of $3.18 billion. DHR's adjusted profit of $1.11 per share beat analysts' projections of $1.03 per share on revenue of $3.08 billion. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on DHR.

DHR opened this morning at $53.40. So far today the stock has hit a low of $53.32 and a high of $57.12. As of 12:20, DHR is trading at $55.87, up $4.52 (8.8%). The chart for DHR looks neutral and S&P gives DHR a 3 STARS (out of 5) hold ranking.

For a bullish hedged play on this stock, I would consider a March bull-put credit spread below the $45 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 6.4% return in just 8 weeks as long as DHR is above $45 at March expiration. Danaher would have to fall by more than 19% before we would start to lose money. Learn more about this type of trade here.

DHR hasn't been below $47 at all in the past year and has shown support around $50 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in DHR.