Agilent Technologies (A) provides solutions in form of bio-analytical and electronic measurement to various industries amongst which communications, electronics, chemical analysis and life sciences are top consumers. Their core businesses encompass the fields of research, electronic measurement, chemical analysis and life sciences and are facilitated through Agilent Technologies Laboratories (Agilent Labs). As recently as 2011, it acquired a number of units namely, Lab901 and Biocius Life Sciences Inc, A2 Technologies and a business concerned with BioSystem Development. P.V.R. s.r.l., which is a vacuum pump manufacturer, was also added to the list.
The stock currently enjoys an EPS of $0.69 and a healthy P/E of 14.72 against an industry and sector average of 48.57 and 22.14 respectively, having a beta of over 1 but less than 2. The company has managed to show an improvement in its revenue in the past one year as compared to its earlier performances and has never disappointed the street in its quarterly earnings estimates/ expectations. Experts also estimate that the earnings of the company are likely to expand by 8 to 10% in the coming quarters in spite of providing guidance below street expectations. In my opinion, the company is on sound footing with its businesses focused on the growth sectors and poses an average risk for its shareholders. Hence investments with an expectation of outperformance in about six months time are recommended.
Danaher Corporation (DHR) is involved in designing, manufacturing and marketing products and services under professional, medical, industrial and commercial categories. It operates in five segments namely Test & Measurement, Environmental, Life Sciences & Diagnostics and Dental, and Industrial Technologies. February 6, 2012, was the crucial day when L-3 Communications Holdings Inc. acquired the Kollmorgen Electro-Optical branch of this company.
The stock has a healthy EPS of $2.77 and PE of only 18.91 against an industry average of $0.32 and 21 respectively. A very healthy ROI of 8.69% and a ROE of 12.64% makes it extremely attractive to investors. The earnings and growth of the company has remained steady over the last three years along with consistency in its relative price changes. The shares of the company have remained stable due to absence of speculative trading by financial institutions along with a beta of less than 1. The last declared result of the company was beyond street expectations pushing its stock prices higher. Keeping in view of the stock’s high earnings, presence in niche segment and relative growth, I recommend buying with a six month outlook.
Teradyne (TER) is a global supplier of automatic test equipment wherein they specialize in all aspects of automatic test systems as also solutions pertaining to them. Their application mainly lies in testing complex electronics in industries like consumer electronics, automotive, computing, telecommunications. It has a number of applications in aerospace and defense industries as well.
The stock made a strong comeback in the Q4 of 2011 almost doubling its EPS, beating the street estimates by a wide margin. Some analysts have also projected higher returns in the coming quarters. Currently, the company enjoys an annualized EPS of $1.97 and a low P/E of 11.40 against an industry average of 13.01. The stock is also showing a beta a shade below 2 making it a moderately stable stock. Further, the shares are under heavy accumulation by a few financial institutions and the stock enjoys a high ROI and ROE of 20.81 and 25.82 respectively. All these factors make the stock an attractive option for investment over a six month period and recommend this stock for investors willing to accept average risks with good returns.
Thermo Fisher Scientific (TMO) is a renowned name in the field of analytical instruments, equipment, reagents and consumables, this company operates through two arms namely analytical technologies and laboratory products and services. Over the years it has also diversified into other fields like software and services related to research, manufacturing, analysis, discovery and diagnostics. While in April 2011, it sold two laboratory testing services businesses, an year later in May 2011, it acquired Dionex Corporation and Sterilin, Ltd followed by acquisition of TREK Diagnostic Systems in July the same year.
Since it boasts of a beta well below 1, it is regarded as a highly consistent stock. The earnings growth and net income of the company also rose moderately over the past year as the company strived to re-structure its business. This was accomplished by hiving off two laboratory testing services namely Athena Diagnostics and Lancaster Laboratories and acquiring Dionex Corporation, Sterilin, Ltd and TREK Diagnostic Systems in 2011. The company has also posted a healthy annualized EPS of $3.41 and a P/E of about 16. It has a strong cash balance to reward its shareholders or expand their business and therefore expects to keep the same momentum in their growth. Keeping these factors in mind, I recommend buying this stock on a medium term perspective.
Analogic Corporation (ALOG) is a small cap technology company that designs and manufactures advanced medical imaging and security systems and subsystems, primarily for the healthcare and airport security. The company sold its hotel business in 2011 and now operates primarily with Medical Technology and Security Technology.
Though the P/E of the company is significantly high at 37.7, the steady and moderate earnings growth and their recent long term supply agreement with L-3 Securities & Detection System augurs well for their sustained business operations. The current EPS of the company is $1.54 making the stock relatively expensive in the current market situations. However, the low beta of less than 1 makes it a stable stock to invest by individuals who are looking to invest in the small cap segment. I therefore recommend a moderate buy in the company as the global economy revives, keeping in view of the future prospects of its business.
About the author:I'm mostly interested in income investing using dividends, preferred stocks and other debt instruments, and pair trading.
I fundamentally analyze every business from the top down.
In my personal life, I have a strong Jewish faith and enjoy playing Scrabble and entrepreneurship.