We recently published a list of Jim Cramer is Talking About These 10 Stocks Amid Global Selloff. Since Danaher Corporation (NYSE:DHR) ranks 6th on the list, it deserves a deeper look.
Jim Cramer in his latest program on CNBC talked about the brutal market selloff of Monday and said days like these could make you “cry yourself to sleep.” Cramer said that this “nasty” selloff was expected.
“It’s exactly what you’d expect at this point in the rate cycle, the point where the Fed is about to start cutting rates to bolster the economy. But the economy is going down,” Cramer said.
Cramer said that the Monday selloff was “vicious enough” to make any investor think why they should stay in the market, but that’s exactly “what you have to do.” He thinks the latest decline is a buying opportunity for long-term investors.
Jim Cramer said that the selloff started because money managers who were borrowing money from Japan to invest in US stocks were caught with their “pants down” when Japan increased interest rates. As a result, these funds were forced to sell their stocks. He thinks it’s not possible to call a bottom on this decline yet “until we know these sellers are done unwinding their trades.”
Cramer said that another key reason why investors were selling on Monday was the notion that the Fed is late on cutting rates. But Cramer said a 25 bps rate cut wouldn’t have mattered a lot and if Fed Chair Jerome Powell sees there is a need for an urgent rate cut, he’d do it.
“He’s got horse sense,” Cramer said.
Jim Cramer said there are no “safe havens” in tech and while he reiterated his bullish view on some notable tech stocks, he advised investors to be ready for “pain” in the near term if they want to invest in technology.
“If you can’t take the pain, then get the heck out of it.”
For this article we watched several latest programs of Jim Cramer and picked 10 important stocks he’s talking about. With each stock we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Danaher Corp (NYSE:DHR)
Number of Hedge Fund Investors: 98
A caller recently asked Jim Cramer about Illumina.
“No, no Illumina. I like Danaher,” Cramer said.
Danaher Corp (NYSE:DHR) is in the news after the company posted stronger-than-expected second-quarter results mainly due to its Biotech and Diagnostics businesses. Analysts believe Danaher is expected to benefit from the BioSecure Act if it’s passed because the act would increase the competitive advantage of US Medtech and Healthcare Equipment firms. Danaher Corp (NYSE:DHR) long-term outlook is positive amid expected inventory destocking, lower interest rates, and effects of Chinese stimulus measures, among other factors. Over the past five years, the stock has traded at an average forward P/E of 29.75x. Although Danaher’s current P/E on this year’s EPS is slightly above its 5-year average, it is trading at a discount based on FY25 and FY26 EPS consensus estimates. Danaher Corp (NYSE:DHR) trades 31x fiscal 2025 earnings and Wall Street expects Danaher Corp (NYSE:DHR) to grow revenue by 8% in the period while earnings growth is expected to come in at 12.30%.
L1 Capital International Fund stated the following regarding Danaher Corporation (NYSE:DHR) in its Q2 2024 investor letter:
“We made a number of relatively modest adjustments to the Portfolio in the June 2024 quarter, totalling less than 10% of the Fund’s investments. We divested our remaining holding in Danaher Corporation (NYSE:DHR). Danaher is one of the leading providers of equipment and services to the life sciences and diagnostics industries and is one the best run industrial businesses in the world. Many companies aim to emulate the ‘Danaher Business System’ of continuous improvement. We have no concerns with the quality of Danaher, the share price simply increased above our view of fair value. A core principle of our investment process is to maintain valuation discipline and we divested our investment, purely on valuation grounds. Danaher has moved to our Bench of potential future investments. Danaher’s share price has fallen around 10% since we sold our investment, and if it continues to drift down, we may have the opportunity to reinvest in a very high-quality business at a more attractive valuation.”
Overall, Danaher Corporation (NYSE:DHR) ranks 6th on Insider Monkey’s list titled Jim Cramer is Talking About These 10 Stocks Amid Global Selloff. While we acknowledge the potential of Danaher Corporation (NYSE:DHR), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DHR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
