A Board Member Bought Almost 3,000 Shares of Pall Corp

We would compare Pall to companies such as Sensata Technologies Holding N.V. (NYSE:ST), Bio-Rad Laboratories, Inc. (NYSE:BIO), Bruker Corporation (NASDAQ:BRKR), and FEI Company (NASDAQ:FEIC). All four of these companies’ stocks trade at more than 20 times trailing earnings, though in terms of forward estimates they actually all trade at a discount to Pall (though in some cases the gap is very narrow). Now, this is generally because they are expected to see a rapid increase in earnings which may not pan out- for example, the respective trailing and forward P/Es for Sensata are 33 and 13. In addition, in many cases these peers have not been performing well recently- Bio-Rad and Bruker actually reported a decline in net income (and only a moderate increase in revenue) in the fourth quarter of 2012 versus a year earlier. FEI’s earnings growth was only 3% over the same period.

As a result we’d conclude that many similar companies are trading at rather high levels based on optimism concerning the next couple years- regardless of the fact that recent quarterly reports have not been particularly rosy. Pall does not look like a value in absolute terms from our analysis of the company, but it at least has been growing its business (in terms of earnings from continued operations) and might be preferable to owning stocks such as Bio-Rad, Bruker, and FEI.

Disclosure: I own no shares of any stocks mentioned in this article.