This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Dover Rewards the Street for Its Confidence

NEW YORK ( TheStreet) -- Whether too high or too low, the Street gets more than its share of criticism for how it prices certain stocks. But when looking at shares of industrial conglomerate Dover (DOV - Get Report), which are up 40% since April, I believe analysts deserve some credit for what I once regarded as misguided optimism.

Given Dover's breadth of end-market exposure, which includes smartphones, commercial refrigerators, gas pumps and so on, I wasn't especially high on the company following its sluggish April quarter. I say "sluggish" here even though I know full well the company posted inline results. But when compared to, say, General Electric (GE), which is equally well-diversified, I've never been impressed with Dover's organic growth. Not to mention, the stock has always been -- in my opinion -- expensive.

Even so, the company's management -- which, in fairness, has posted solid book-to-bill performance --  always remained optimistic, promising a strong second-half recovery. The Street, meanwhile, having always been in love with the stock, didn't need much convincing. Since the April conference call, shares of Dover, which (then) traded around $67 per share, are now resting near their 52-week high at around $93. While these shares may not be in the bargain bin today, following a strong third quarter $100 per share is a given.

Dover's management, which I have to now regard as highly underrated, had advised investors earlier in the year that it would be the drilling business and improvements in refrigeration that would lead the second-half recovery. With revenue advancing 7% year-over-year to $2.3 billion, management was right on target --  growth was led primarily by drilling and downstream markets within energy business.

Refrigeration/food equipment markets were also strong. Given the frequency with which Dover does deals, it was especially encouraging that Dover posted 3% organic growth, which continues to outperformed rivals including Danaher (DHR) and Eaton (ETN). In this sector, there is nothing that analysts love to scrutinize more.

Organic growth, which measures a company's operational performance using only internal resources and excluding events like acquisitions, is an important metric used to gauge performances of companies that are so well diversified. It's rare that companies like Dover can enter so many markets without going the merger and acquisitions route.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DOV $63.50 0.00%
AAPL $94.19 0.00%
FB $118.06 0.00%
GOOG $695.70 0.00%
TSLA $222.56 0.00%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs