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It's been a more standard year for diversified manufacturer
Danaher (DHR - Get Report) -- shares have matched the market's performance for most of 2012. But this stock could be due for some outperformance in the next few months as industrial sales turn up from a cyclical trough. Danaher is a niche player that operates in a large number of niches: because the firm sells everything from advanced medical to tools and testing instruments, it's less susceptible to the ebb and flow of consumer sales than many other manufacturers are.
Growth by acquisition has been Danaher's strategy for the past several years, giving the firm to immediately step into a new business as long as it can buy it at a good price. Much of that acquisition strategy has been fueled internally by cash, resulting in a very manageable debt load for investors. With a net cash position that's ballooned in the last few years, and equity valuations still depressed under the thumb of anxious investors, that should open the door to some attractive tuck-in acquisition opportunities for Danaher this year.
Danaher is fastidious about its financial performance. It avoids buying new businesses that will dilute its double-digit margins, and it has managed to deliver stair-step growth on its income statement in each of the last three years. We're betting on shares of this Rocket Stock this week.