Danaher Corporation produces and sells electronic test tools, storage tank leak detection systems, motion, speed and position instruments and sensing devices, and general purpose and automotive specialty tools. For the 9 months ended 9/29/00, revenues rose 17% to $2.75B. Net income rose 26% to $236.4M. Revenues reflect acquisitions and strong sales volumes. Net income also reflects productivity improvements.

December 10, 2000

Danaher holds two dominant positions in the professional tools sector with the company’s Delta and Ammco brands. These brand name tools are growing at roughly 10% a year through a network of 1,300 distributors. This successful network has helped to generate 58% of total sales for the company and 60% of profits. Currently, the company’s total sales are growing at 13% annually, which is 5% above the industry average. Continuing to make new all time highs, the stock managed to peek into new territory on Friday with an intraday run to $68.88. Although shares did slip back from this high, the stock still added $0.19 on the day and continues to inch higher. Uncertainty in the presidency and on the earnings front has kept money flowing into more conservative stocks, so we may see more short-term gains on the horizon. With this in mind, we’ll look for additional entry points to correspond with good volume of 500 thousand shares and a breach of the all time high of $68.31. Further up, we’ll expect more resistance to present an even tougher challenge at $75. The 5-dma of $67.29 will bolster support at $67 and provide the initial foothold on the downside. Additional support could come near $66 (10-dma), but be prepared for any drops through this level, as our stop resides just lower at $66. However, should the stock does react with a solid bounce from these support levels on good mid-day volume of 215 thousand shares, then look to open new plays.

Picked on November 16th @ $63.50
Change since picked +4.44
Stop Loss @ $66.00

December 14, 2000

Experiencing some noteworthy selling pressure the last few days, DHR shares continued to drop from their highs made earlier in the week. This major drop occurred on Wednesday, as the stock showed little resistance to its 5-day and 10-day moving averages. This may be an indication of future near-term weakness. Our tightened stop of $66.00 was well placed and helped us to avoid unnecessary losses. We’ll keep a close watch on the future developments of Danaher.

Picked on November 16th @ $63.50
Profit/Loss = +2.50 (+ 4%) (Stopped Monday @ $66.00)
Best Profit = +6.31 (+10%)
Stop Loss @ $66.00

December 12, 2000

Posting consistent quarterly earnings growth since 1991 has enabled Danaher's stock to quadrupled over the past four years, which isn't bad considering its industry is growing at 8% a year. On Monday, DHR pushed into new territory and now seems to be focused on exceeding tough resistance at the $70 mark. Lead by a good bounce from the 5-dma of $67.84, Monday’s intra-day advance climbed as high as $69.81 and helped to confirm resistance at $70. Today’s movement followed a similar pattern, as the stock again bounced off the 5-dma $67.76 and ran to intra-day highs ($69.13). Although volume for the week has been relatively light at about 250,000 shares traded, it does increase near the 50-dma, currently at $67.54. We’ll look for the 5-dma to remain the earliest level of support. This level is also braced by lows from the past three trading days. Just lower, the 10-dma of $66.84 now supports recent lows near $66.50 and will likely be our last base ahead of our stop at $66.00. However, with many technical indicators pointing higher, with the exception of an overbought stochastics reading, we feel that DHR is poised for another near-term advance.

Picked on November 16th @ $63.50
Change since picked +4.44
Stop Loss @ $66.00