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Jonathan D. Poland
Jonathan D. Poland

Nobody Ever Mentions Danaher!

April 11, 2007 | About:

A manufacturing conglomerate out of our nation’s capital run by two brilliant managers and investors: Mitchell and Steven Rales. These guys have been the best of the best over the last 2 decades. Danaher, the symbol is DHR on the NYSE. They have grown their mundane manufacturing business in spectacular fashion.

An initial investment of $100,000 has risen to over $7 Million, a 23.67% annualized rate. Compare that to Coca-Cola (13%/year) and Berkshire Hathaway (14%/year). Each of these companies has produced stellar track records, but Danaher with "The Rales Brothers" have done one hell of good job with their assets.

Using their own business system, Danaher has bought a plethora of businesses to add to their own line and let's look at the company from a numbers standpoint.

Market Value (mil)
Debt (mil.)
Total Capitalization (mil.)
Book Value
Sales (mil.)
Net Income (mil.)
Earned Per Share
Current EPS
2007 Estimate
2002 EPS
1997 EPS
Current Dividend
Net Profit Margin
Growth in EPS
5 Year Growth
10 Year Growth

These are great returns and as you can see have correlated to great market returns as well. Earnings increases usually do!

Are you late to the party? Maybe... but maybe not! Right now, the company is trading with a "below average" price to earnings multiple - 19. Their historical P/E is over 23. The two brothers are great businessmen and obviously have an amazing process to make this thing go!

My publishing firm, PigsGetRich, does not own and has not recommended this stock to our clients. However, if they earn the $3.72 projected and the P/E continues to get back to normal historic levels, the price could be $85 - $90 in a year... “20% ain't too bad!”

Jonathan D. Poland is the Founder, Editor and Chief of the PigsGetRich Investment Network. www.pigsgetrich.com

About the author:

Jonathan D. Poland
Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

Rating: 3.3/5 (7 votes)


Armeetofo - 10 years ago    Report SPAM
it will be too big to be next Tyco?
Armeetofo - 10 years ago    Report SPAM
I hold this company since Aug. 2005, up nicely but getting to big
Wildcat - 10 years ago    Report SPAM
Roll ups always blow up.

What is the internal rate of growth?

How much growth comes from buyouts ?
Pigsgetrich - 10 years ago    Report SPAM
Only time will tell... I would like to provide the AutoNation example.
Wildcat - 10 years ago    Report SPAM
Just look at the internal growth rate

Sooner or later it will run out of things to buy that will grow EPS

Then it will blow up just like Worldcom - Tyco

Tyco just ran out of things to buy out
Armeetofo - 10 years ago    Report SPAM
I did resaech about 7 hours and bought some more at $71.50
Armeetofo - 10 years ago    Report SPAM
forgive me for misspelling, i mean 'research'
Armeetofo - 10 years ago    Report SPAM

i have to thank you for issues that you mentioned above, i did some more receach and come to my own conclusion, thanks again

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GuruFocus has detected 6 Warning Signs with Danaher Corp $dhr.
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