NEW YORK (TheStreet) -- Danaher (DHR) is on a roll following its recent acquisition of Pall Corporation coupled with its decision to split into a life sciences company and an industrial company. Chase Growth Fund manager Peter Tuz said Monday he expects the momentum to continue.
"We expect Danaher to grow earnings approximately 11% per year for the next three to four years," Tuz said. "But it is selling for basically a market multiple at this time and we believe it should be selling for a better-than-market multiple because of its good history of growth by acquisition."
Danaher shares are up 4.5% in the past month compared to a flat S&P 500. The company is trading at 18 times 2016 full year estimated earnings.
"Growth is hard to find these days and Alliance Data has put together a string of 15% to 18% earnings growth going back three to five years largely by successfully acquiring private label credit card businesses, as well as niche companies in the consumer loyalty business," said Tuz.
"Obviously Stifel's business is tied to the equity and credit markets, but the company has done a very good job of growing by acquisition over the past few years by picking up parts of Legg Mason, Keefe Bruyette & Woods and most recently Sterne Agee," he said. The company's stock has jumped 7% this year compared to fairly flat performances by the big banks thus far in 2015.
Finally, Tuz is a fan of Community Health Systems (CYH) for its ability to grow via smart acquisitions.
"Last year the company acquired HMA, boosted its hospital count from 160 to 200 and now owns 30,000 hospital beds around the country," said Tuz about the hospital owner. Its stock has surged 33% in the past 12 months. "Obamacare has led to a big increase in usage and we believe that continues no matter what happens to Obamacare in the courts in coming months."