US equity markets steadily advanced in March with the Dow Jones Industrial Average, S&P 500 and NASDAQ improving 7.1%, 6.6% and 6.8%, respectively. Investors reacted favorably to US Federal Reserve Chair Janet Yellen’s dovish stance, as she advocated a more cautious approach to policy changes due to the fragile global economic environment. Consequently, the US dollar index turned moderately bearish for the month, sliding 3.6%. Also during the month, the final fourth quarter 2015 GDP growth estimate was revised higher by 40 basis points to 1.4% as a result of stronger-than-expected personal consumption expenditures. Despite the aforementioned stronger growth, consumer spending and personal income showed early signs of slowing this year. As a result, several analysts cut their first quarter GDP growth estimates from roughly 2% to 1%. For the first quarter, the Dow and S&P 500 was up 1.5% and 0.8%, respectively. The NASDAQ was down 2.7%.

Laboratory Instrumentation

The Index climbed 7.4% in March to 236.61 but ended the first quarter down 3.4%. All but one company traded higher this month. Affymetrix, which completed its previously announced sale to Thermo Fisher Scientific for $14 a share on March 31 (see page 2), finished down 0.2%. However, the acquisition was contested by a group of former Affymetrix executives, which submitted a significantly higher bid, sending the price to a monthly high of $15.99 per share on March 18.

Leading the Index this month was NanoString Technologies, which jumped 26.4%. The company climbed 18.8% on March 1 after it announced an expanded partnership with Merck for the development and commercialization of diagnostic cancer tests. The new deal includes an initial $12 million upfront payment and up to $12 million in milestone payments over the next year.

Four other companies grew by double digits this month. Fluidigm, which recovered some of its earlier losses this year due to disappointing earnings, climbed 21.7% in March. Nevertheless, shares were down 25.3% for the quarter. Bio-Techne and MTS Systems advanced 10.1% and 10.7% for the month, respectively.

Finally, VWR expanded 10.9% for the month. However, after the market close on March 31, the company announced that it would begin the 8.0 million public stock offering by one of its shareholders, previously reported in November 2015 (see IBO 11/30/15). The shareholder will also allow an overallotment of 1.2 million shares.

Only two companies reported earnings this month. On March 1, Kewaunee Scientific reported that GAAP EPS for the fiscal third quarter ending January 31 jumped 72% to $0.31 due to stronger-than-normal US demand during the period. Shares improved 2.7% for the month. On March 9, Enzo Biochem reported an EPS loss of $0.07 for the fiscal second quarter ending January 31, which was just shy of expectations. However, sales were ahead of consensus as strong molecular testing service revenue offset lower demand for life science products from academic and research laboratories. Shares advanced 7.3% for the month.

Harvard Bioscience delayed its SEC Form 10-K filing just one day before the March 15 due date as a result of a forensic investigation. The company discovered the embezzlement of less than $50,000 by one of its employees at Denville Scientific. Unable to meet the extended filing deadline, the company announced on March 28 preliminary fourth quarter and full-year 2015 sales of $28 million and $109 million, respectively, which were ahead of analysts’ expectations. Shares soared 16.5% the next day but ended the month up 9.8%.

Illumina was tested this month as CEO Jay Flatley announced on March 8 that he would step down from his position and assume the role of executive chairman, effective July 5 (see IBO 3/15/15). President Francis deSouza will succeed Mr. Flatley. Despite sliding 6.9% for the day, the company erased earlier losses to end the month up 7.9%.

In other financial news, FEI entered a credit agreement on March 24 for a $200 million unsecured revolving credit facility, including an option for up to another $200 million upon request. Shares jumped 9.5% for the month.

On March 1, Barclays initiated coverage of Bruker and Waters with an “Overweight” and “Equal Weight” rating, respectively, and started coverage of PerkinElmer with an “Underweight” rating.

Diversified Instrumentation

The Index soared 9.2% for the month and is up 6.2% year to date to 199.19. All eight companies traded higher led by Corning, which advanced 14.2%. On March 31, Jefferies raised its price target on the company from $19 to $21 but maintained its “Hold” rating.

AMETEK, which grew 7.7% for the month, announced on March 11 an amendment to its revolving credit facility, increasing the size by $150 million to $850 million to be used for growth initiatives or potential acquisition targets. The company was initiated with an “Outperform” rating by William Blair on March 22.

Also on March 11, Xylem closed a €500 million ($560 million) 2.25% senior notes offering due in 2023 to help repay an outstanding loan maturing this year. Stifel Nicolaus downgraded the company on March 21 from “Buy” to “Hold” because of valuation concerns. However, shares improved 9.3% for the month.

International

All Asia Pacific equity markets ended in positive territory in March, led by China’s Shanghai Composite and India’s Sensex 30, which jumped 11.8% and 10.2%, respectively. Japan’s Nikkei 225 rose 4.6%. Prices for all Pacific Rim companies in the IBO Stock Table advanced this month. Precision System Science recorded the largest gain, climbing 20.0%.

Most major European Indexes traded higher in March despite anxieties over the terrorist attacks in Brussels. Germany’s DAX and the UK’s FTSE 100 expanded 5.0% and 1.3% for the month, respectively.

Prices for the UK-based companies in the IBO Stock Table were mixed. Horizon Discovery increased the most, rising 4.4%, while thinly traded Scientific Digital Imaging slumped 19.9%.

Abcam also traded significantly lower this month, falling 12.0%. On March 7, the company reported that adjusted EPS grew 2.8% to 9.64 pence ($0.15) for the six months ending December 31, 2015. The company also raised its interim dividend by a similar rate to 2.35 pence ($0.04). On March 26, JPMorgan Chase lowered its price target for the company by 4% to GBX 581 ($8.36) but maintained its “Neutral” rating.

Among other European companies, Exiqon experienced the largest price gain for the month, soaring 49.2%. The company received a takeover offer from QIAGEN on March 29 for DKK 18 ($2.70) per share (see page 2). Exiqon also confirmed its 2016 revenue guidance of DKK 180–185 million ($26–$27 million) for growth of roughly 20% excluding the OEM business. Full-year EBIT is projected to more than double.

Biotage, which jumped 14.6% for the month, provided an average three-year financial goal for the 2016–2018 period of 8% organic revenue growth and EBIT margin of 10%.

Conversely, both Tecan and Merck KGaA contracted for the month, declining 5.5% and 6.5%, respectively. On March 9, Merck KGaA reported that fourth quarter 2015 adjusted EPS slipped 0.9% to €1.13 ($1.26) as a result of higher interest expenses following the completed acquisition of Sigma-Aldrich (see IBO 11/30/15). Full-year 2015 adjusted EPS advanced 5.9% to €4.87 ($5.41). The company also increased its annual dividend by 5% to €1.05 ($1.16) and projected slightly higher organic sales for 2016.

Tecan reported on March 15 that full-year 2015 EPS jumped 38.9% to CHF 4.96 ($5.17) due to increased sales volume, reduced R&D expenses and a lower tax rate. The company projected 2016 currency-neutral sales to grow in double digits.