Analysis: DHR GE HD

After you receive this Alert, we will be selling 50 shares of Danaher (DHR) at roughly $124.14. Following the trade, DHR will represent 2.86% of the portfolio.

We are raising a bit more cash, thus providing us with plenty of flexibility to buy stocks on the way down. Even though the market has acted badly this week, opportunities will arise because there are companies out there performing better than what their stock action suggests. We will keep members updated with any further moves today.

We trimmed Danaher earlier this week in our Alert here and locked in a price slightly below the new all-time highs that were made after management announced the $21.4 billion acquisition of General Electric's (GE) BioPharma assets, which you can read about here.

Without question, this deal was an absolute win for Danaher because it accelerates the transformation to the secular growth, high margin Life Sciences industry from a more cyclical, Industrial-based company. However the higher premium (which DHR deserves) is already being built into its current levels. Plus, acquisition size/integration efforts from this deal will likely take off an M&A catalyst for quite some time. We still view the stock as a core holding, but there is no time to be greedy after the stock's multi-year gains and its fast +20% start year to date. This cash raised will come useful as the market comes in. We will lock in a huge gain of about 47% with this trim.

Lastly, we want to note that due to Jim mentioning the name on Wednesday, we are currently restricted from trading shares of Home Depot (HD) . However, if not for the restrictions we would be looking to add to this position on today's weakness as we believe the housing market is showing signs of a bottom and that past performance was hampered by transient weather issues.