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Hill-Rom Holdings, Inc.

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February 20, 2018 – Comments (0) | RELATED TICKERS: HRC


Buying your way to growth through acquisitions is, in my opinion, a losers strategy. All it seems to do is completely screw up a company's financial statements. HRC has been trying to get the acquisition thing right year after year since 2011, and the only thing that seems to have changed in any appreciable amount is free cash flow, down 5% YOY, and debt, up 7% YOY. Not exactly stellar.

Admittedly sales increased YOY 3% and earnings increased 4% YOY. I get it, you have to spend money to make money, and over time, acquisition spending should help the company gain market share and thus increase earnings. I just don't think I want to be the one on one of the company's surgical tables when it comes to my hard earned cash.

So what’s this deal? My short-term (3-6 week hold) target price for the stock is $87.85, with an initial trailing stop at $86.52. My current future target price for the stock (a 5 year hold) is $147, which is an average annual return of 13%.

A prior five year hold of the stock would have returned an average of 31% per year. As is always the case, please keep in mind that any investment has the potential for loss and that past performance is no guarantee of future results.

Hill-Rom Holdings, Inc. (NYSE: HRC) - FYE 01/2017 - OVER VALUED - The stock is trading at levels above my most recent $64 close target - Please See Linked Worksheet

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