We’re exiting an inconsistent stock to free up space for better prospects ahead
We’re exiting our position in Danaher , selling 200 shares at roughly $208 each. Our early spring cleaning of the portfolio continued. We are selling our remaining shares in Danaher on Thursday, registering a disappointing loss of 7% on stock purchased from 2023 to 2025. Our final sale follows our move to cut this position in half last week at about the same price. For far too long, we’ve been waiting for Danaher’s bioprocessing business to normalize after its Covid-era surge. And, for far too long, we’ve been disappointed by the lack of consistent high single-digit percentage revenue growth paired with margin expansion. We could continue to remain patient and allow this stock to take up a precious spot in the portfolio. But we would rather free up space for newer opportunities. While we can’t completely blame management for industry dynamics, a new change for us is our lack of confidence in their mergers and acquisitions playbook. When Danaher was at its finest, the company was consistently making acquisitions and driving revenue and cost synergies through applying what it calls the Danaher Business System . Dealmaking was its bread and butter, creating a company that was one of the great earnings compounders of the era. Our recollection of Danaher’s track record is what kept us in the stock longer than we should have. We don’t think the last few acquisitions of Abcam and Aldevron moved the needle as we thought they would. This makes us pessimistic about Danaher’s newest acquisition, Masimo , a leading specialty diagnostics provider of pulse oximetry and other patient monitoring solutions. Danaher announced last week that it was buying the company for $9.9 billion, including debt. We would have preferred to see Danaher use its cash pile on an acquisition of a more life sciences- focused business that caters to the faster-growing biotech industry, or aggressively step up its own share repurchases. Another factor in our decision is the longstanding legal battle between Apple and Masimo, which could create some risks in the future. (Jim Cramer’s Charitable Trust is long AAPL. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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