Since being spun off from Danaher (DHR) - Get Danaher Corporation Report , Fortive (FTV) - Get Fortive Corp. Report  stock is up 10.6%. Can this spinoff spin higher? I don't think so. Here's why.

Fortive is expected to have Ebitda margins of 22.8% in 2016 and about 23.5% in 2017, which would produce earnings of $2.70 in 2017. Sales next year are only expected to grow about 3.5% to $6.4 billion, so in terms of valuation (19.6x), the stock seems to be fully valued.

Now, a little history. On Aug. 31, 2015, Danaher announced it would purchase the industrial filtration maker Pall Corporation for $13.8 billion. Danaher then merged some of its industrial businesses with Pall and spin off the leftovers into a newly formed company called Fortive. Danaher kept most of Pall's life sciences filtration businesses.

Fortive operates in two main segments: Professional Instrumentation and Industrial Technologies. In Professional Instrumentation, the company is probably best known for its brand of Fluke electrical meters. In Industrial Technology, the company is best known for its Matco Tools division.

At the end of 2015, Fortive had revenue of $6.2 billion and gross margins in the high 40s. Professional Instrumentation is 48% of total revenue and Industrial Technology makes up the remaining 52%. Approximately 58% of revenues come from North America, with 16% from the European Union.

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Since Fortive has the Danaher deal-making DNA, the company's goal is to grow through acquisitions. For example, when Danaher acquired Fluke Instrumentation in 1998, Fluke had just $340 million in revenue and a 10% operating margin. After 32 acquisitions, Fluke ended 2015 with revenue in excess of $1.2 billion, an operating margin that exceeds 25% and a return on invested capital of approximately 20% versus 5% in 1998.

Fortive believes it can spend about $1 billion a year out of its free cash flow on deal making. Combined with organic growth and 50 basis points of margin expansion from cost reductions, the company thinks it can get to top quartile earnings growth.

On Oct. 26, Fortive reported fiscal 2016 third-quarter earnings of 65 cents a share 6 cents ahead of the consensus estimate. Revenue rose 2.8% to $1.57 billion versus the $1.54 billion consensus estimate.

Management cut guidance for the fourth quarter and blamed an uncertain macro economic environment. For the fourth quarter, the company sees earnings between 63 cents and 67 cents versus the previous estimate of 68 cents. Fortive deployed its first $200 million towards acquisitions in order to strengthen its business.

These factors plus the fully valued shares are why you don't invest in Fortive now. 

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.