Jim Cramer’s Game Plan: 23 Stocks to Watch

5. Danaher Corporation (NYSE:DHR)

Number of Hedge Fund Holders: 83

Danaher Corporation (NYSE:DHR) is one of Cramer’s favorites. He acknowledged that he has some concerns about it while remarking that it is an important position.

“Now, one of my Charitable Trust’s favorite companies is Danaher. It’s an amazing life sciences conglomerate that I think might be ready to return to its old greatness. The stock’s been doing nothing for ages, but then again, Danaher can’t outrun its clients and its clients are new young biotechs with deep pockets. Unfortunately, that’s a scarce commodity in this environment.

Still, there are enough young biotechs and of course, just older healthcare companies that are out there that I bet Danner can tell a story of an expanding client base and growing orders. It’s a very important position… I’m obviously on tenterhooks about it. I am concerned because it has not done well.”

Danaher (NYSE:DHR) specializes in designing and manufacturing a diverse range of professional, medical, industrial, and commercial products and services on a global scale. The company’s focus is on advancing the development and production of therapeutics, while also providing essential analytical tools, diagnostic products, and laboratory automation solutions across multiple sectors.

Management’s expectation shows a core revenue decline in the low single digits for the full year, along with an anticipated adjusted operating profit margin of around 29%. CEO Rainer Blair has previously highlighted the positive momentum within the bioprocessing business and noted market share gains for the molecular diagnostic testing division, particularly through its Cepheid brand.

On October 1, The Fly reported that Evercore ISI analyst Vijay Kumar raised the price target on Danaher (NYSE:DHR) to $278 from $275 and maintained an Outperform rating. In the MedTech sector, utilization rates remained favorable entering the third quarter, and the outlook for capital expenditures next year appears to be strong.

Within the life sciences tools arena, bioprocessing trends are expected to improve in the latter half of the year, though discussions continue regarding the instrument outlook and potential impacts from stimulus efforts in China, especially following the recent stock performance in this sector, as per the MedTech and Tools Q3 preview.