Yahoo Finance Is Danaher Corp (NYSE:DHR) the Best Undervalued Stock Pick of Billionaire Paul Tudor Jones?
We recently published a list of Top Dividend Stocks to Buy in 2024 According to Billionaire Paul Tudor Jones. Since Danaher Corp (NYSE:DHR) ranks 8th in the list, it deserves a deeper look.
Billionaire Paul Tudor Jones recently made headlines after he participated in the Robin Hood foundation’s fundraising event dressed as Neo from the movie “The Matrix.” The event raised $68.5 million. The billionaire, who founded Tudor Investment Corporation in 1980, couldn’t help himself but talk about investing during the event, and highlighted the importance of “Warren Buffett-style compounding.”
“Somewhere, somehow the multiplicative power of compound put you in this seat,” Tudor Jones said.
Paul Tudor Jones’ Recession Prediction
During an interview last year, the billionaire had predicted that a recession was expected to start in the first quarter of 2024. He said at the time that the US was in its “weakest position” since World War II. However, the market rally fueled by AI proved the prediction wrong. Earlier this year, Jones said in another interview that the financial markets represent people’s ideas and what they make of the economic situation. Paul Tudor Jones said that there’s a chance the stock market would be “here or lower” in the next five to ten years. However, the billionaire also said it’s possible that the markets would go higher from here if the next President of the US devises a better “policy response” next year.
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He’s been vocal about AI lately and sharing his thoughts about the impact of technology on our society. He thinks AI could be the “knight on the horse that rides and saves us.”
But AI-related threats worry Paul Tudor Jones. In an interview in January he referred to a survey where close to 3,000 AI experts were asked whether they believe AI would end humanity. According to Jones, a whopping 58% of the experts said yes. The billionaire said US policymakers will have to decide how to tackle this problem. Jones believes AI is growing at an “unbridled pace” since there’s so much money to be made in the domain but the biggest problem for policymakers would be to balance the benefits and threats of AI to make it sustainable.
For this article we scanned billionaire Paul Tudor Jones’ Q1 portfolio and chose his top dividend stock picks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Danaher Corp (NYSE:DHR)
Billionaire Paul Tudor Jones Q1’2024 Stake: $41,867,805
Danaher Corp (NYSE:DHR) ranks 8th on our list of the best dividend stock picks of billionaire Paul Tudor Jones. The manufacturer of medical and industrial equipment’s stock has a dividend yield of about 0.9%. Analysts expect Danaher Corp’s (NYSE:DHR) sales growth to enter the upbeat territory this year. During the first quarter, Danaher Corp’s (NYSE:DHR) net sales declined 2.5% on a YoY basis. However, this decline was better than the 10.3% decline Danaher Corp (NYSE:DHR) saw in full-year 2023. While the stock’s P/E ratio is higher at 43, it’s trading at around 29X its forward P/E ratio based on its 2025 EPS estimate of $8.67. Analysts believe the worst is over for the stock and investors should wait for a turnaround. While further revenue decline is expected amid a muted activity in the biosciences and biopharma segments, long-term analysts believe Danaher Corp (NYSE:DHR) shares are a Buy at the current levels. DHR is one of the top dividend stocks to buy in 2024
Cooper Investors Global Equities Fund stated the following regarding Danaher Corporation (NYSE:DHR) in its first quarter 2024 investor letter:
“On the funding side, the portfolio fully exited Danaher Corporation (NYSE:DHR) during the quarter. We no longer see compelling Risk Adjusted Value Latency today with the shares rebounding 35% since the October lows and once again trading at a significant relative premium (50-60%), despite tough operating trends in the bioprocessing market. Having owned Danaher continuously for the past 14 years this is ‘the end of an era’ and so bears a brief tribute.
Danaher was the longest held stock in the portfolio having been initially purchased in July 2010. Investing alongside the Rales brothers has been an incredible experience. In returns generation, Danaher was a true 10-bagger; purchased at USD$25 a share and sold at ~USD$255, generating a return over the holding period of over 1,300% and an IRR of approximately 18%.
Yet its value has not merely been as a winning stock but also as a teacher, a source of idea generation, and a spin-off machine. Danaher was the original ‘Capital Allocator Champion’, through which we learned about the margin-expansionary benefits of focused business systems operating with continuous improvement – Kaizens running concurrently on the lab or factory floor. We also built an understanding of how Danaher operates its M&A philosophy, a major driver of its success – what to buy, when to buy, who to buy from, how to integrate, and how much to pay. Studying this allowed us to develop Pattern Recognition of ‘what good looks like’ when meeting similar companies. Without Danaher, we may never have owned Domino Printing Sciences, Constellation Software, Halma, Roper, Ametek or Diploma, not to mention the spin- offs, some of which remain in the portfolio today. The business remains on our Watchlist through our continuous coverage of the Life Sciences cluster.”
Overall, Danaher Corp (NYSE:DHR) ranks 8th in Insider Monkey’s list of Top Dividend Stocks to Buy in 2024 According to Billionaire Paul Tudor Jones. You can visit Top Dividend Stocks to Buy in 2024 According to Billionaire Paul Tudor Jones to see other stock picks of Billionaire Paul Tudor Jones. While we acknowledge the potential of Danaher Corp (NYSE:DHR), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Danaher Corp (NYSE:DHR) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
