Danaher is on a roll following its recent acquisition of Pall Corporation coupled with its decision to split into a life sciences company and an industrial company. Chase Growth Fund manager Peter Tuz expects the momentum to continue. ‘We expect Danaher to grow earnings approximately 11% per year for the next 3 to 4 years,’ says Tuz. ‘But it is selling for basically a market multiple at this time and we believe it should be selling for a better-than-market multiple because of its good history of growth by acquisition.’ Danaher shares are up 4.5% in the past month compared to a flat S&P 500. The company is trading at 18 times 2016 full year estimated earnings. Tuz also sees market-beating growth ahead for Alliance Data Systems, saying the credit card company will be able to hit $350 a share in the next few years, up from its current $300 level. ‘Growth is hard to find these days and Alliance Data has put together a string of 15% to 18% earnings growth going back 3 to 5 years largely by successfully acquiring private label credit card businesses, as well as niche companies in the consumer loyalty business,’ says Tuz.
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