More From Shannon Black
How Post-Brexit Trade Deals Impact US Multinationals in Europe
If the United Kingdom doesn’t strike a deal with EU, tariffs on industrial goods and services would range between 0% and 16%, depending on the nature of the products.
Honeywell Fell 7.5% as Business Update Spooked Investors
On October 7, Honeywell (HON) stock fell 7.5% to $106.94. This was Honeywell’s biggest one-day drop since August 2011.
Dover Corporation: Growing by Acquiring
Since its inception, Dover Corporation (DOV) has followed an acquisition-based growth strategy. The company has acquired over 100 manufacturing companies since 1955, and it currently manages close to 30 independently operating companies under its umbrella.
What You Should Know about Stanley Security’s Business Mix
The Stanley Security business saw a steady decline in the last four years with sales falling from $2.4 billion in 2012 to ~$2.1 billion in 2015.
Caterpillar Doubles Its Market Share in China’s Shrinking Market
In 2012, Caterpillar (CAT) had a market share of 7% in the excavator manufacturing industry. Its share doubled to 14% YTD in 2016.
Jacobs Engineering Stock Reacted to Trump’s Victory
After Donald Trump won the US presidential election, Jacobs Engineering (JEC) rose 9% on November 9. For now, the benefits are just speculation.
Dover Refrigeration & Food Equipment: Keeping It Cool
The Dover Refrigeration & Food Equipment unit is a major provider of refrigerated display cases and kitchen equipment such as cookers, mixers, braising pans, and packaging and processing solutions for the meat and poultry business.
TDG Boosted Its Proprietary Product Revenue with This Acquisition
TransDigm (TDG) has increased the size of its existing term loan facility by $650 million to facilitate a one-time special dividend of $24 per share.
Danaher Corporation’s Excess Returns Fail to Impress
Earlier in this series, we looked at Danaher’s return on invested capital on a standalone basis. However, we were only looking at half the story.
Northrop Faces Fierce Challenge from Lockheed over T-X Contract
Both Boeing’s (BA) and Northrop Grumman’s (NOC) teams have submitted clean sheet bids to the US Air Force.
Introducing Danaher: A Diversified Healthcare Company
Danaher is a diversified conglomerate with a market cap of ~$56 billion. Its customers are mostly professionals and organizations rather than retail consumers.
Honeywell Aerospace’s Recent Developments in Connectivity
In September 2015, Honeywell acquired Aviaso Software, a privately held aviation software company based in Switzerland. Aviaso develops and provides fuel efficiency and emission-saving software to the airline industry.
Can the Learjet–Textron Cessna Combination Fly Higher?
Rumors have been flying about the potential sale of Learjet to Cessna Aircraft. Learjet is a light business jet manufacturing unit housed by Bombardier (BDRBF).
Honeywell’s Management Seeks to Reassure Investors
Honeywell (HON) released its 3Q16 earnings on October 21. It provided a business update earlier in the month, but there were a few surprises in the release.
Raytheon: A Top Pick to Hedge against Political Risks
Credit Suisse cited L-3 Communications (LLL), Raytheon (RTN), and General Dynamics (GD) as its picks to hedge against the election cycle.
Why Danaher Is Relatively Immune from Growth Concerns in China
Organically, Danaher (DGR) has grown at a CAGR of roughly 10% in China over the last five years. Approximately 50% of the company’s revenues in China are derived from its Diagnostics segment.
What’s Stanley Black & Decker’s Market Position?
Stanley Black & Decker (SWK) has a stupendous record of launching at least 1,000 products every year at an average of three products a day.
Leases Drive Up Credit Losses in Deere’s Financial Unit
Deere & Company’s (DE) financial services (IYF) unit represented 10.2% of revenues in 3Q16, which is comparable to levels of 10.4% in 3Q15.
A Brief Overview of Honeywell Automation and Control Solutions
Honeywell (HON) provides control solutions for various residential and industrial applications through the Honeywell Automation and Control Solutions–ACS unit.
Dover Fluids: A Brief Overview
Dover Corporation’s (DOV) Fluids businesses include the Pump Solutions Group (or PSG), which provides pumping solutions to several end markets.
Market Expectations from Rockwell Collins in Its 3Q16 Earnings
Rockwell Collins (COL), which makes avionics for commercial and military aircraft, is scheduled to declare its 3Q16 earnings on July 25. The consensus analyst estimate COL’s adjusted EPS to rise by 19% on a year-over-year basis to $1.58.
What Are Stanley Black & Decker’s Business Segments?
Stanley Black & Decker (SWK) markets its products through three business segments: Global Tools & Storage, Security, and Industrials.
Analysts Expect Raytheon to Beat Its 3Q16 Earnings Guidance
Raytheon will release its 3Q16 earnings on October 27. The consensus forecast is for Raytheon to post an adjusted EPS of $1.66—12.9% growth YoY.
Emerson Electric Looks Cheap after Its 3Q16 Results
Emerson Electric (EMR) released its fiscal 3Q16 earnings after the Market opened on August 2, 2016. It resulted in a negative price action of 4.9%.
Why Stanley Security Changed Gears
Profit margins in Stanley Security increased from 10.2% in 2013 to 11.4% in 2015.
Forex Headwinds, Divestitures Dampen Emerson’s Guidance
Emerson Electric’s (EMR) trailing three-month (or TTM3) orders in June declined 4.4% on an organic basis. Much of the decline was led by the Process Management segment.
Danaher to Declare Its First Earnings after Fortive Separation
Danaher Corporation (DHR), which became a diversified healthcare company after its restructuring actions, is slated to declare its 3Q16 earnings on October 20. The consensus Wall Street estimate is for Danaher to post adjusted EPS of $0.83 on sales of ~$4.1 billion.
Deere’s Financial Unit Continues to Bleed from Used Equipment
Deere (DE) Financial Services represented 11.5% of the company’s revenues in 4Q16, which is higher than 9.7% in 4Q15.
Jacobs Engineering Posts the Highest Annual Free Cash Flows
Jacobs Engineering Group declared its 4Q16 and fiscal 2016 results on November 22. It reported adjusted EPS (earnings per share) of $0.77.
After 3 Years, Rockwell Could See Sales Growth in Fiscal 2017
Rockwell Automation maintains that oil prices have recovered since the beginning of 2016, and most of its business in the heavy industries end market is expected to stabilize.
Compared to Its Peers, Rockwell Automation’s Returns Are Stellar
Among the analysts surveyed by Bloomberg, three rated Rockwell Automation (ROK) as a “buy,” 15 rated it as a “hold,” and five rated it as a “sell.”
Defense Sector Stocks Achieve Liftoff from Trump’s Victory
Because Republicans retained control of both legislative houses, investors expected that defense budgets would be easier to pass.
Elections up the Ante in Choosing Best Defense Stock Investment
With the US presidential elections upon us in a few weeks, investors may be looking for a cover that protects their portfolio from political risks.
Northrop Grumman Stock Jumps as Earnings Crush Estimates
Leading defense contractor (PPA) Northrop Grumman (NOC) declared its 3Q16 earnings on October 26, 2016. The company’s earnings per share rose 22%.
Rockwell Collins Acquires B/E Aerospace in a Deal-Making Weekend
On October 23, Rockwell Collins (COL) announced that it intends to acquire B/E Aerospace (BEAV) for a total consideration of $8.3 billion. Within Rockwell Collins, B/E Aerospace will operate as its new Aircraft Interior Systems segment.
With Phenomenex, Danaher Has an Attractive Consumables Asset
On October 12, Danaher announced its an agreement to acquire Phenomenex, a privately held manufacturer of separation and purification consumables.
Higher G650 Mix Puts Margins of General Dynamics in Top Gear
Despite the challenging conditions, General Dynamics (GD) has managed to raise its margins in its Aerospace segment.
Textron Aviation, Industrials Manage to Put Quarterly Sales in the Green
Textron’s (TXT) revenues in 3Q16 rose 2.2% to ~$3.3 billion, missing estimates by $150 million. Sales growth was driven by 2.1% inorganic growth.
Northrop Grumman Faces Dogfight over Air Force Trainer Contract
The US Air Force has put up an order for 350 trainer aircraft on competing bids. The request for proposal is likely to be finalized by December 2016.
Caterpillar Invests in an Indoor Autonomous Vehicle Startup
On October 5, the venture capital arms of General Electric and Caterpillar, along with a group of other investors, raised $30 million for Clearpath Robotics.
Caterpillar’s 3Q16 Earnings Bring ‘Inflection’ Back into Focus
Caterpillar, the world’s largest manufacturer of construction and mining equipment, will declare its 3Q16 earnings before the market opens on October 25.
NetJets Orders Secure Textron Aviation amid Business Jet Weakness
Textron Aviation increase its sales in the last two quarters after gaining traction for its new Latitude business jets. It has secured 150 orders from NetJets.
How Acuity Brands’ Year-to-Date Returns Stack Up
Among the ratings listed in Bloomberg, seven analysts have “buy” recommendations, and four have “hold” recommendations on Acuity Brands (AYI).
How This Emerson Sales Strategy Is Reeling in Big Box Retailers
Emerson Electric’s (EMR) omnichannel sales strategy is a multichannel approach that provides an integrated shopping experience.
Emerson Enjoying the Heat from the Sunbelt’s Population Boom
Because the Sunbelt region is the primary market for HVAC manufacturers that are Emerson’s customers, it could be a key growth driver in the coming quarters.
How Emerson Process Management Stacks Up to Competitors
Revenues for Emerson’s (EMR) Process Management segment have risen from $7.0 billion in 2011 to $8.5 billion in 2015 at a compound annual growth rate of 4%.
Not Much to Brag About for Emerson’s Industrial Automation Unit
Revenues for Emerson’s Industrial Automation segment have fallen from $5.3 billion in 2011 to $4.1 billion in 2015.
Understanding the Synergies behind Emerson’s Deal with Pentair
Emerson Electric’s (EMR) acquisition of Pentair Valves & Controls will give Emerson the best of both worlds and strengthen areas that are currently weak or nonexistent.
Emerson Snaps Up Pentair’s Valves Business for $3.1 Billion
On August 18, 2016, Emerson Electric (EMR) announced that it signed an agreement to acquire Pentair’s (PNR) Valves & Controls business for $3.2 billion.
What Are Emerson Electric’s Core Business Areas?
This is the second series in our company overview of Emerson Electric (EMR). The company recently realigned its business after finding buyers for its Network Power segment.
Why Clarcor Has Been Considered a Super Stock This Year
Investors who took positions in Clarcor (CLC) stock at the beginning of the year have few reasons to complain.
Higher Productivity and Lower Sales Highlight Clarcor’s 3Q Results
Clarcor beat Wall Street estimates by four cents with 3Q16 adjusted earnings per share (or EPS) of $0.73.
Clarcor’s Top Line Bears the Brunt of Weak Oil Markets in 3Q
Clarcor revenues (CLC) fell 7.3% year-over-year (or YoY) to $331.4 million in 3Q16, which was below Wall Street estimates of $339 million.
What Made Cepheid Attractive to Danaher?
On September 6, 2016, Danaher (DHR) announced that it has entered into a definitive agreement to acquire Cepheid (CPHD) for $4 billion.
Digging around to Find Drivers in Danaher’s Environmental Segment
Danaher’s Environmental & Applied Solutions (or, EAS) segment represented 25% of company sales in 2015, or $3.5 billion in value terms.
How Danaher Diagnostics Fares against Its Competition
Danaher’s Diagnostics unit had operating margins of 15.4% in 2015 and 17.2% in 1H16.
The Key Product Lines That Make Up Danaher’s Diagnostics Business
Danaher’s (DHR) Diagnostics unit, established through the acquisition of Radiometer in 2004, earned $4.9 billion in sales in 2015.
Acquiring Pall Corp. Still Breathing Life into Danaher
The acquisition of Pall has allowed Danaher to strengthen its presence in the life sciences market.
Pall Acquisition Gave Birth to Danaher’s Filtration Business
Danaher’s filtration business came into existence through the acquisition of Pall in 2015.
Understanding the Skeleton of Danaher’s Life Sciences Business
Customers in the Danaher life sciences business generally look at how the technology offered by a company can fit into their workflows.
How Danaher’s Business Segments Are Structured
Each segment of Danaher is made up of roughly about 50 independent operating companies that Danaher has acquired over the years.
How United Technologies Has Evolved over the Years
The origins of United Technologies (UTX) lie in the creation of the United Aircraft and Transportation Company (or UATC) in 1929.
Emerson Electric: The Giant with a 125-Year History
Emerson Electric earned revenues of $22.3 billion in fiscal 2015. About 48% of the company’s fiscal 2015 revenues came from the United States and Canada.
How Does Emerson Compare to Its Peers?
Emerson has managed to find high returns for its prior as well as its incremental invested capital.
Does Emerson Have a Competitive Advantage?
An analysis of Emerson Electric’s (EMR) ROIC between 1995 and 2015 shows that 2001–2003 were the only years when ROIC fell below 13%.
More Losses? Caterpillar Puts Part of Its Mining Business on Sale
Caterpillar logged four consecutive quarters of operating losses in the Resource Industries segment—it houses the mining equipment business.
How Are Danaher’s Returns Compared to Its Industry Peers’?
Danaher’s ROIC fell steadily from 15.5% in 2006 to 8.5% in 2015, indicating that it has probably had fewer high return reinvestment opportunities since then.
Investors Shouldn’t Expect Near-Term Optimism from Caterpillar
Caterpillar (CAT) released its retail statistics for July on a three-month rolling basis on August 18. However, Caterpillar’s retail sales fell in July.
Is Danaher Losing Its Competitive Advantage?
We analyzed Danaher’s (DHR) ROIC in the 20-year period between 1995 and 2015 and classified the period of study into 16 buckets of five years each.
Danaher’s Journey from Corporate Raider to Corporate Statesman
Danaher (DHR) was the brainchild of brothers Steven and Mitchell Rales. It was incorporated as a holding company in 1984.
What Do Wall Street Analysts Think about Deere?
The consensus rating among Bloomberg-listed analysts covering Deere & Company has leaned more towards a “neutral” rating since the beginning of 2016.
Transdigm Continues as a ‘Super Stock’ in 2016
Transdigm Group (TDG) became public in March 2006. Since then, the company’s stock has compounded wealth at an astonishing clip.
AGCO Acquires Cimbria, Expands in Seed and Grain Handling
On June 29, AGCO (AGCO) announced that it acquired Cimbria Holdings from Silverfleet Capital for 310 million euros ($340 million).
Parker-Hannifin’s 2017 Guidance Suggests Slowdown in Industrials
Parker-Hannifin has guided its fiscal 2017 adjusted EPS at $6.40–$7.10. The midpoint of this range is roughly 4.5% higher than $6.46 in fiscal 2016.
Spirit AeroSystems’ Shares Take a Hop as it Wings Airbus Deal
In 2Q16, Spirit AeroSystems’ Fuselage Systems represented 50% of total revenues. Propulsion Systems and Wing Systems made up 26.3% and 23.2%, respectively.
Emerson’s 15% Profit Drop in Q3 Mitigated by Its Solid Cash Flow
Despite a 15% decline in net profits, Emerson Electric (EMR) reported a solid cash flow performance in 3Q16.
Key Contributors to Emerson Electric’s Improving Margins in Q3
Emerson’s (EMR) operating margins expanded by 20 basis points YoY (year-over-year) to 13.9% in 3Q16.
Better-than-Expected 2Q16 Operations Propel United Technologies
United Technologies (UTX), a diversified industrial (RGI) conglomerate, released its earnings report for 2Q16 on July 26, 2016.
How Consolidation in the Mining Industry Impacts Caterpillar
Caterpillar’s (CAT) sales in the Resource Industries segment, which houses the Mining Equipment business, fell by 29% year-over-year in 2Q16 to $1.4 billion.
How Honeywell Is Addressing Brexit Concerns
After the results of the Brexit vote, Honeywell (HON) maintained that the near-term impact of the event would be minimal.
Europe Steps Up for 3M, Boosts Sales in 2Q16
Among 3M’s regional markets, the EMEA region delivered the best performance in total growth terms. The region accounts for roughly 20% of 3M’s annual sales.
Key Takeaways from 3M’s 2Q16 Sales Performance
In terms of the trend in sales performance, 3M (MMM) continues to do pretty well in businesses with a consumer focus.
3M in 2Q16: Improving Operations Mask Underlying Demand Weakness
On July 26, 2016, 3M (MMM) released its 2Q16 earnings before the Markets opened. The earnings release resulted in a negative price action of 1.1%, and 3M stock closed at $177.66.
Dover’s Engineered Systems Segment Glimmers Amid Gloom
Engineered systems sales were responsible for 35.1% of Dover’s (DOV) total sales and 47% of its total segment profits in 2Q16.
Why Stanley Black & Decker Upgraded Its Guidance in 2Q16 Earnings Release
Stanley Black & Decker’s (SWK) consolidated revenues increased by 2.3% year-over-year to $2.9 billion.
Stanley Black & Decker Shares Roar on Spectacular 2Q16 Performance
Stanley Black & Decker (SWK), the world’s leading toolmaker, declared its 2Q16 earnings before the Market opened on July 22. SWK stock closed 4.8% higher on the day of the earnings release.
Analyzing Honeywell Aerospace’s Strengths, Weaknesses
Honeywell’s lucrative commercial aftermarket business, which makes up 32% of its Aerospace segment’s revenue, saw an uptick of 6% in organic sales in 2Q16.
Weak Industrial Demand a Cause for Honeywell Shares to Retreat
Honeywell (HON), a diversified, century-old industrial (XLI) conglomerate, released its earnings report for 2Q16 on July 22, 2016.
Other Defense Majors Made for Better 2016 Picks Than Raytheon
Raytheon (LMT) has managed to beat consensus EPS (earnings per share) as well as revenue estimates seven times in the last eight quarters.
How Do Major Analysts View Rockwell Collins’s Stock?
The consensus rating among the 19 analysts covering Rockwell Collins (COL) leans toward a “buy” call.
How Elon Musk’s SpaceX Is Turning Up the Heat on Lockheed Martin
Lockheed Martin’s (LMT) Space Systems segment generated $9.1 billion in revenues in 2015, representing 20% of total annual revenues.
Why Did Analysts Revise Their Ratings for UTX in 2Q16?
The analysts from Goldman Sachs (GS) and RBC Capital Markets (RY) changed their ratings on UTX from “buy” to “hold” by the end of the quarter on June 30, 2016.
How 3M Company’s Acquisition Strategy Has Changed
3M Company’s (MMM) acquisition strategy for the last ten years can be classified as “BI” (before Inge) and “AI” (after Inge).
What Are the Financial Objectives of 3M Company’s 5-Year Plan?
In February 2016, 3M Company (MMM) set financial objectives for the five-year period from 2016 to 2020 that were slightly below its previous expectations.
What Strategy Is 3M Company Using to Increase Cost Savings?
Realizing that its capital structure was sub-optimal and was leading to a high cost of capital, 3M Company started adding leverage.
How Good Is the Quality of 3M Company’s Earnings?
3M Company’s (MMM) accruals ratios using the balance sheet and the cash flow methods rose considerably in 2015.
How Did United Technologies View Brexit Going into Its 2Q16 Earnings?
United Technologies (UTX) plans to release its 2Q16 earnings on July 19, 2016. With more than 8,000 employees in the UK, UTX’s stock fell by 3.4% to $98.89 on June 24 following the Brexit referendum.
How Wall Street Views Dover Corporation’s 2Q16 Earnings
The diversified industrials company Dover Corporation (DOV) is expected to declare its 2Q16 earnings on July 19, 2016. In 1Q16, Dover’s management downgraded its sales guidance, citing weaker fundamentals in the oil and gas markets
How 3M Company’s Products Look After Your Health
Revenues from 3M Company’s (MMM) Healthcare segment rose from 16.7% ($5 billion) of total annual revenue in 2011 to 17.5% ($5.4 billion) in 2015.
3M Consumer Products: Your Everyday Kitchen and Office Companions
3M Company’s (MMM) Consumer Solutions segment is made up of four diverse businesses, which garnered a combined annual revenue of $4.4 billion in 2015.