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(B)(N) DHR Danaher Corporation

November 30, 2013
Pipe Dreams

You need a stock?

Drama. Wall Street never sleeps. There’s just too much money to worry about and it can’t be left alone. A happy analyst at Goldman Sachs has opined that Danaher Corporation could be trading at $88 sometime in the future (the near future?) and up $14 from its current $74 to $75 (a +20% gain) and still more above the $56 to $60 it got early this year which adds up to +30% rising to +50% if the future were now (Barron’s, November 26, 2013, Goldman Ups Danaher To Buy, Cuts Waters Corp. To Neutral and The Street, November 29, 2013, Danaher Looks Like a Relative Bargain).

Of course, it’s been in our inventory for a while too, since much lower prices of $55 in 2011. Please see Exhibit 2 below, Red line Stock Price (SP) above the Black line Risk Price (SF) which is the only kind of stock that we will buy and hold.

But we’re not particularly interested in selling or taking profits on the latecomers. What good is money when there’s an investment that is as good as cash – 100% capital safety – and better than money because it has some hope of a return above the rate on inflation.

However, Wall Street is not in the business of buying and holding stocks for long. They’re not investors. Wall Street is in the business of selling stocks, sometimes from their own inventory, something that’s been on the shelf for a while and has somehow increased in price, or for clients who have large positions that they want to sell, possibly to take profits for a better year-end and tax planning. And what they say can move prices.

Our estimate of the downside in the stock price due to the demonstrated price volatility is as much as minus ($6) per share in the next quarter so that it could be trading between the current $74 and $68 to $80 without surprise. The dividend yield is minuscule; a paltry 0.13% for a payout of $70 million to its shareholders this year from this company with assets of $34 billion and a current market value of $53 billion.

Just Buy The Right Stocks At The Right Time - Mozart

Just Buy The Right Stocks At The Right Time
– Mozart

But we never leave our money alone either. Danaher Corporation competes with three other companies that similarly provide very high tech, very high quality, industrial products. These are ABB Limited, a Swiss corporation, Honeywell International, and General Electric. Please see Exhibit 1 below.

And all four of them have been in the Perpetual Bond™ all year long. Please click on the links The Industrials – Prices & Portfolio and Portfolio & Cask Flow Summary for more details. The portfolio returned +30% this year and has a dividend yield of another 1.7% and we didn’t have to do anything. Just buy the right stocks at the right time.

Exhibit 1: The Industrials – Fundamentals – November 2013

The Industrials - Fundamentals - November 2013

The Industrials – Fundamentals – November 2013

Exhibit 2: (B)(N) DHR Danaher Corporation – Risk Price Chart

(B)(N) DHR Danaher Corporation

(B)(N) DHR Danaher Corporation

Danaher Corporation designs, manufactures & markets professional, medical, industrial & commercial products. Its business consists of five segments: Test & Measurement; Environmental; Life Sciences & Diagnostics; Dental & Industrial Technologies.

(Please Click on the Chart to make it larger if required.)

From the Company: Danaher Corporation designs, manufactures, and markets professional, medical, industrial, and commercial products and services worldwide. The company’s Test & Measurement segment provides electronic measurement instruments; and monitoring, management, and optimization tools, which are used in the design, development, manufacture, installation, deployment, and operation of electronics equipment, and communications networks and services. Its Environmental segment offers instrumentation and disinfection systems to analyze and manage the quality of ultra pure, potable, waste, ground, and ocean water in residential, commercial, industrial, and natural resource applications in water quality and retail/commercial petroleum markets. The company’s Life Sciences & Diagnostics segment provides various research and clinical tools for scientists to study cells and its components; and analytical instruments, reagents, consumables, software, and services for hospitals, physician’s offices, reference laboratories, and various critical care settings. Its Dental segment provides consumables, equipment, and services for the diagnosis, treatment, and prevention of disease and ailments of the teeth, gums, and supporting bone. The company’s Industrial Technologies segment offers components and systems that are incorporated by original equipment manufacturers and systems integrators for sale into applications and end-markets. Danaher Corporation also provides sensors and control instruments to manufacturing markets and electric utility industry; energetic material systems to systems integrators and prime contractors; supplemental braking systems for commercial vehicles; and cloud-based GPS tracking and fleet management software to fleet operators. The company was formerly known as Diversified Mortgage Investors, Inc. and changed its name to Danaher Corporation in 1984. Danaher Corporation was founded in 1969, has 63,000 employees and is headquartered in Washington, District of Columbia.

For more information and additional references to the theory, please see our recent Post, The RiskWerk Company Glossary.

And for more on what risk averse investing has done for us this year, please see our recent Posts on The S&P TSX “Hangdog” Market or The Wall Street Put or specialty markets such as The Dow Transports & Utilities or (B)(N) The Woods Are Burning, or for the real class actionLa Dolce Vita – Let’s Do Prada! and It’s For You, Dear on the smartphone business.

And for more stocks at high prices, The World’s Most Talked About Stocks or Earnings Don’t Matter – NASDAQ 100.

And for more on what’s Working in AmericaBig OilShopping in America or Banking in America, to name just a few.

Postscript

We are The RiskWerk Company and care not a jot for mutual funds, hedge funds, “alternative investments”, the “risk/reward equation” and every other unprovable artifact of investment lore. We have just one product

The Perpetual Bond
Alpha-smart with 100% Capital Safety and 100% Liquidity
Guaranteed
With No Fees and No Loads on Capital

For more information on RiskWerk, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used. Related data may be obtained from us for free in a machine readable format by request to RiskWerk@gmail.com.

Disclaimer

Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”. Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability. We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now. The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”, ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.

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