Danaher Corp. (DHR)

(A Top Pick Jan 17/19, Up 54%) A life-sciences companies that also does consumables and mass spectrometers. They recently purchased the GE biopharma section. They have big margins coming into the company. Earnings were higher than their peer group. He has owned this since 2013 and he sees no reason to sell it. He wouldn't enter now with 30x earnings. It works as a core holding since life science has good growth potential.

Danaher is like owning private equity. Serial acquisitors of businesses to improve and generate free cash flow well above working capital. In all the right categories right now. About to spin-off dental business. Into life sciences, consumables, and wastewater management. Growing nicely around 15%. Dividend growing 14% year over year, has grown 420% over last 15 years.

(A Top Pick March 13/17. Up 19.26%) Along with all the life sciences companies, it’s been on a tear. This is because margins are growing. A lot of these are overseas. He likes this because they are in 4 major businesses, dental, water, environmental and all of the usable things for testing that are in laboratories. Still a Hold.

(A Top Pick March 13/17. Up 13%.) This is in 5 businesses, life sciences, diagnostics, water quality, product idea and dental. These are all industries that have burgeoning growth going forward. Danaher makes acquisitions of companies in those industries, and then turns them around. The dividend has been growing at roughly a 12%-15% clip, so a 13% return on the stock price is no surprise.

This is in 4 basic businesses, which are all trends moving forward. They got rid of their industrial business about a year ago with a spinoff, and what is left is what he wants to own. Life sciences, diagnostics, dental and environment. Instead of owning oil and gas stocks, his resource of choice is water. This company does wastewater management. Long-term returns have been almost double what the S&P 500 has been over the last 5, 10, 20 years. These guys are like private equities. They come in and buy a company, but unlike the 3 Gs of the world, where they rip everything apart, they work with the owners and build the businesses as turnarounds. This is where the value added comes from. Dividend growth, free cash flow growth and revenue growth. In 3 of the 4 businesses, the margins are mid-teens and with the water business, it is up in the 20s, creating huge returns on capital. Yield of 0.6%. (Analysts’ price target is $89.82.)

(Market Call Minute.) Well-run company.

(A Top Pick July 15/14. Up 8.95%.) A multi-industrial with exposure to medical devices and your typical businesses as well. In this market, this is one of the better industrials to own, because it doesn’t have exposure to oil and gas. The new CEO has done a great job of navigating shareholders expectations. Feels they have a significant amount of CapX to do a deal. It is an M&A story, and people are waiting for the M&A to happen.

(Top Pick Jul 15/14, Up 6.72%) Thinks they will migrate away from the industrial side and toward the medical/dental side. This is an M&A and rollup story. The stock looks cheaper now. The cash balance suggests they will do more M&A. Thinks there is still more upside.

Over a long period of time, this has a nice growth in assets and a very consistent model price. His model price is $85.55, a 10% upside.