Major US equity indexes advanced in June despite weak economic data and mounting geopolitical tension in the Middle East and Ukraine. Within the US, retail sales missed expectations, job growth remained lackluster and first quarter GDP contraction was revised from 1.0% to 2.9%, as a result of extreme weather conditions. In addition, the International Monetary Fund cut its economic growth forecast for the US from 2.8% to 2.0%. Despite these concerns, consumer confidence, manufacturing and housing markets maintained momentum. For the month, the Dow Jones Industrial Average, S&P 500 and NASDAQ expanded 0.7%, 1.9% and 3.9%, respectively. For the first half of the year, the Dow, S&P 500 and NASDAQ are up 1.5%, 6.1%, and 5.5%, respectively.

All four IBO Stock Indexes advanced in June, led by the Process/Metrology/Motion Instrumentation Stock Index, which climbed 7.6%. The Lab Consumables/Equipment, Laboratory Instrumentation and Diversified Instrumentation Stock Indexes improved 3.2%, 1.9% and 1.2%, respectively.

Laboratory Instrumentation Stock Index

The Index rose 1.9% in June to close at 1,049.91 and is up 7.7% for the year. Sequenom recorded the strongest gain, rising 25.9%. On June 16, the company climbed 9.2% after it announced a collaborative agreement with Quest Diagnostics to expand access to its noninvasive prenatal test. The following day, Wedbush raised its price target on Sequenom by 25% to $5 per share. The company also was upgraded by William Blair on June 23 from “Market Perform” to “Outperform.”

Also benefiting from a ratings promotion was Bruker, which advanced 15.8% for the month. On June 19, Wells Fargo upgraded the company from “Market Perform” to “Outperform” and raised its price target range by roughly 20% to $25–$27 a share, citing operational improvement from restructuring efforts.

Three additional companies in the Index increased by double digits this month, including Pacific Biosciences, which advanced 24.6%. The company climbed 8.2% in the two days ending June 20 after it announced a comarketing agreement with GenDx for full-length Human Leukocyte Antigen gene-sequencing products. Harvard Bioscience expanded 10.4% in June, as shares climbed 6.7% on the final trading day of the month.

Illumina maintained momentum, rising 12.8% for the month. On June 4, the company initiated a convertible senior notes offering to repay its current outstanding convertible debt. The offering was completed on June 11 for net proceeds of $1.13 billion. However, during the month, nine insiders sold a combined 175,305 shares, which was the largest monthly insider sale since July 2013.

Similar to Illumina, there was also notable insider selling at PerkinElmer, as six insiders sold a combined 354,345 shares in June. However, the company gained 4.2% for the month.

Only two companies in the Index traded lower in June. Despite launching its high-throughput PCT-based system, Pressure BioSciences fell 21.7% for the month. Bio-Rad Laboratories recorded a modest decline, sliding 0.8% for the month. On June 20, the company secured a credit facility of up to $200 million.

Process/Metrology/Motion Instrumentation Stock Index

Zygo was removed from the Index following the completed acquisition by AMETEK on June 20 (see IBO 4/15/14). For the month, the Index grew 7.6% to 792.38 and is up 2.6% for the year. In June, all five companies traded higher, led by Veeco Instruments, which gained 11.8%. FEI, which rose 8.7% for the month, announced on June 5 a 108% quarterly dividend increase to $0.25 per share.

Lab Consumables/Equipment Stock Index

The Index grew 3.2% in June to 947.67 and is up 4.6% year to date. All seven companies were in positive territory for the month. Cellular Dynamics had the highest return in June, climbing 29.1%.

Enzo Biochem also recorded a significant price increase, rising 27.7% for the month. The company reported a narrower-than-expected adjusted fiscal third quarter loss (see page 12) on June 9 due to lower operating expenses. On June 23, it announced a $7.0 million settlement agreement from PerkinElmer (see page 11). Finally, the company jumped 7.1% on June 30, as it was added to the Russell 2000 and Russell 3000 Indexes. Given the strong monthly gain, Enzo boasts the highest year to date return among all companies in the IBO Stock Table, having climbed 79.8%.

On June 24, Kewaunee Scientific reported lower earnings for the fiscal fourth quarter ending April 30 of $0.37 a share. However, the company projected improvements for fiscal 2015 based on its strong international backlog to begin the year. Shares rose 3.4% the following day and were up 8.4% for the month.

Diversified Instrumentation Stock Index

In June, the Index lifted 1.2% to 222.37, with all companies advancing except for AMETEK, which slipped 1.5%. Xylem had the highest return, increasing 4.8%. For the first half of the year, the Index has expanded 3.0%.

On June 4, Agilent Technologies amended its fiscal second quarter EPS from $0.45 to $0.41 as a result of a tax-expense adjustment. However, previously reported second quarter adjusted EPS of $0.72 was not affected. The company announced on June 12 that it will redeem its current outstanding $500 million senior notes due September 2015 in order to reduce debt prior to the spinoff of Keysight Technologies, its electronic-measurement business. On June 23, Goldman Sachs initiated coverage of the company with a “Neutral” rating.

International

A majority of Asia Pacific equity markets advanced in June, including 3.6% growth for the Nikkei 225. Markets benefited from improved Chinese manufacturing data and an increased revision to capital expenditure growth in Japan. For the month, prices for five of the seven Pacific Region companies in the IBO stock table improved, Techcomp was unchanged and GL Sciences slipped 2.3%. Precision System Science recorded the strongest gain for the month, rising 24.0%. JEOL also recorded strong monthly gains, ascending 17.4%. Based on new financial information filed on June 30, the company reported that fiscal full-year revenues ending March 31 grew 24.7% (see page 12).

In contrast, European equity markets traded mostly lower in June. The London FTSE 100 fell 1.5% for the month due to tightening of monetary policy and expected higher interest rates. Most UK-based companies in the IBO stock table declined, led by Scientific Digital Imaging, which fell 9.7%. Bucking the negative trend were Horizon Discovery and Porvair, which improved 7.5% and 2.1%, respectively. On June 23, Porvair reported currency-neutral revenue growth of 36% for the six months ending May 31 and 26% EPS growth to £0.06 ($0.10) as a result of three large projects. Excluding these projects, sales improved 12% on a currency-neutral basis.

Oxford Instruments, which slipped 0.7% for the month, announced on June 10 that full-year adjusted EPS ending March 31 grew 2% to £0.68 ($1.07). The company stated that orders for the first two months of the fiscal year are higher than a year ago on both a reported and organic basis.

On June 12, Halma reported 6% organic revenue growth for the fiscal year ending March 29, including similar growth in the first and second halves of the year. Adjusted full-year EPS increased 10% to £0.28 ($0.45). The company also raised its annual dividend by 7% to £0.11 ($0.18). Shares were slightly lower for the month. On June 27, BNP Paribas initiated coverage of Spectris with an “Outperform” rating and a price target of £26.5 ($45.1).