Entering text into the input field will update the search result below

Fortive: Looks Expensive, But Long-Term Value Is Still There

Apr. 03, 2021 5:26 AM ETFortive Corporation (FTV)DHR, VNT3 Comments


  • Fortive is well-positioned with its diversified business portfolio and has a long-term growth aspect with its exposure to the automation industry.
  • After the spin-off deal, the company will seek additional investment opportunities, potentially adding additional value.
  • The price is at a par value of $70, and my recommendation is to take a cautious approach to buy.


Fortive (NYSE:FTV) is well-positioned for the reopening of the economy, and it will be a good selection for long-term holders. The resilience of the SaaS businesses has provided room for the company to continuously invest in R&D during the pandemic. The company has good exposure to the cyclical industries and automation, which will benefit the most from the economic recovery. After the spin-off deal, the company will seek additional investment opportunities, potentially adding additional value.

The potential business lineup from M&A activity makes the valuation very tricky, and it will always make the stock look expensive. However, I find that there is still long-term value that exists at the current price range of $70. I recommend the new buyers cautiously enter the position or buy at a potential dip.


Fortive is a diversified industrial conglomerate. It has multiple business lines, and the company grouped them into three categories: Intelligent Operating Solutions, Precision Technologies, and Advanced Healthcare Solutions. The major businesses include Fluke (intelligent operating solutions, thermal imaging and remote display), Accruent (intelligent operating solutions, asset management software), Tektronix (precision technologies, measurement and monitoring technology), and ASP (advanced sterilization products, infection prevention). The business lines are well explained here.

The core businesses have an organic sales growth rate of 3-7% on an annual basis depending on the economic cycle. Its business model seeks growth from M&A activities, just like its origin company, Danaher (DHR). The company looks for attractive businesses or markets continuously and creates a business portfolio through merger activities. After acquisitions, it integrates the new businesses under the "Fortive Business System," the core value of the company. The company sharpens the merged businesses' strength through R&D and marketing efforts and makes the operation efficient via lean management or "kaizen."

Why Fortive is good for the long term?

This article was written by

We are a team of CFA, CPA, and economists. Our research and analysis provide a range of target prices.Value Investment with Business Fundamentals in various industries including Retail / Industrial / Technology.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.