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Excerpt from our One Page Barron's Summary (receive it weekly by email by signing up here):

Measuring Up by Michael Santoli

Highlighted companies: Agilent Technologies Inc. (NYSE:A), Verigy Ltd. (NASDAQ:VRGY), Tektronix Inc. (TEK), Thermo-Electron Corp. (NYSE:TMO)
Summary: Agilent Technologies Inc. (A) operates two divisions: electronic measurement and bio-analytics, which serve the wireless, chemical and life-sciences industries. Over the past two years it has bought back $4B of its own shares, and plans to buy another $2B over the next two years (bringing its current market cap down to $12B). Some investors worry overly-aggressive and risky acquisitions may jeopardize an otherwise strong cash flow. Their response: "The most important thing is that acquisitions not destroy shareholder value. Our sweet spot is smaller, gap-filling technology acquisitions." Its stated revenue growth goal is 10% (through new products, market-share gains, and acquisitions) -- 4% better than market average. Earnings are approaching $2/share, giving it a 18x P/E multiple -- not cheap, but companies in a steady, high-return industry routinely sport premium valuations. Margins stand to gain from (1) outsourcing manufacturing, (2) its shrinking share base, (3) inventory trimming, and (4) improving receivables collection. Analysts have mixed views: five Buys and Agilent Technologies 5-year Weekly Chart 22 10 06five Holds and an average forecast of $37. There is speculation Agilent may initiate a cash dividend to accompany its share repurchases. Barron's bottom line: "Rather than betting on which new gizmo or highly-touted drug might be a blockbuster, why not bank on the company that sells technology prospectors vital tools? Well-run and with excellent footholds in several electronics-testing markets, Agilent is worth a look. Its shares should rise 15% over the next year."
Quick comment: See Agilent's Q3 earnings conference call transcript, and an excerpt therefrom in which they comment on their Wireless R&D • Average Joe Investor's Careful Look At Agilent Technologies • Jim Cramer mentions Agilent: I, II, III, IV

Source: Agilent Technologies: Steady Returns and a Shrinking Share Base -- Barron's