IBO Stock Indexes March Forward in September

In September, the US economy remained vigorous as US economic output surpassed previous projections. The US GDP grew 3.1% in the second quarter, versus last month’s upward revision of 3.0%, signifying the fastest US economic growth in more than two years. Overall, for the first half of 2017, US GDP rose 2.1%, supported by strong consumer spending. For the third quarter, US GDP is expected to grow 2.2% but may see an upgrade due to increased retail and wholesale inventories. Starting from October, the US Federal Reserve plans to unwind its $4.5 trillion balance sheet by collecting and erasing $10 billion in principal per month. This means that the Fed will not be using the collected proceeds to reinvest in treasury and mortgage bonds. Also, the Fed left its lending rate unchanged at 1%­­­­­­­­­­­­-1.25%.

US equity markets finished the month in strong form as the Dow Jones Industrial Average (DJIA) climbed 2.1% to 22,405.09, followed by the S&P 500’s solid increase of 1.9%, closing at 2,519.36. The NASDAQ Composite grew slightly by 1.0% to close at 6,495.96. Year to date, the DJIA and S&P 500 have risen 13.4% and 12.5%, respectively. The NASDAQ composite has gained the most, advancing 20.7% for the year.


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Laboratory Instrumentation Stock Index

For September, this IBO Index fell slightly by 0.1% to 322.96 and has advanced 32.8% year to date. A majority of the companies in the Index finished in positive territory, with Fluidigm, Harvard Bioscience and Kewaunee Scientific share prices growing double digits. The trio led the Index in percentage growth, increasing 10.3%, 21.0%, and 14.6%, respectively, for the month.

In contrast, Agilent Technologies remained essentially flat, dipping slightly below last month’s close. The company declared a quarterly dividend of 0.80%, or $0.132 per share, to be paid on October 25. Similarly, Becton, Dickinson share prices slipped 1.7% for the month, dropping to $195.95. On September 22, Wells Fargo initiated an “outperform” rating for the stock, settings its target price at $225.00. Since then, the stock price has risen slightly.

Bio-Rad Laboratories’ share price grew 2.0% to $222.22 in September and is up 21.9% year to date. On September 18, Deutsche Bank reiterated its “buy” rating on the stock, keeping its price target of $255.00. Shares initially increased to $233.97 on September 20, the month’s highest price, after the stock’s rating update but fell back down.

Enzo Biochem’s shares fell 7.0% despite beating analysts’ EPS estimates, along with a 6.0% increase in revenues (see Bottom Line). On September 27, share price peaked at $11.47 for the month but has fallen to $10.46 since. Year to date, share prices are up 50.7%, right behind Illumina, which has a 55.6% year-to-date price increase. However, Illumina share prices decreased 2.6% for the month. On September 26, Goldman Sachs reiterated its “neutral” rating for the stock, prompting share price to dip slightly for the month.


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Diversified Instrumentation Stock Index

The Diversified IBO Index grew 4.1% to 249.35 in September, as every company in the Index closed in positive territory. Illinois Tool Works (ITW) advanced 7.6% for the month, leading the Index in percentage growth. Year to date, the Index has risen 21.3%, with AMETEK advancing the most, at 35.9%. Xylem’s share prices saw the least amount of growth among Index stocks, edging upwards by just 0.9%.

Danaher’s shares increased 2.8% for the month, and rose nearly 2% since JP Morgan Chase reiterated its “overweight” rating on September 8, along with a $95.00 price target, for the stock. Year to date, share prices have recorded 10.2% growth.

Illinois Tool Works (ITW) closed out the month at $147.97 and received two ratings updates. On September 13, Royal Bank of Canada reiterated its “hold” rating with a price target of $143.00 for the stock. Since the ratings update, ITW share prices rose about 3%. On September 26, Citigroup also reiterated its previous rating of “buy”, with a price target of $162.00. However, Citigroup’s update minimally impacted share price, as ITW climbed just 0.4% since then.

Roper Technologies’ share price grew 5.6% for the month and is up 33.0% for the year. On September 20, JP Morgan Chase upgraded its ratings from “neutral” to “overweight”, setting a new price target of $275.00. Xylem shares were given a “buy” rating from Cowen and Co. on September 21, with a price target of $70.00.


International Stock Index

Asia Pacific equity markets traded modestly, as growth averaged around the low single digits for the month. Japan’s Nikkei 225 and the Thailand’s SET Index advanced 3.6%, leading the APAC Indexes in growth. GL Sciences grew in the double digits this month, leading the Index in percentage growth. GL Sciences advanced 11.5% to ¥1,702 ($15.12 at ¥112.54=$1) for the month and 92.3% year to date. JEOL finished with double-digit percentage growth as well, to close at ¥572 ($5.08). The company advanced 10.2% for the month and 12.2% for the year.

Shimadzu finished the month with a high-single digit gain, increasing 9.6% in share price to ¥2,216 ($19.69) and rising 19.0% for the year. Hitachi High Technologies grew 3.9% but has fallen 13.5% year to date to close at ¥4,080 ($36.25). Hong Kong’s Techcomp decreased 3.7% for the month, closing at HKD 1.82 ($0.23 at HKD 7.81=$1). Similarly, Horiba and Precision System Science (PSS) both decreased for the month, dropping 5.6% and 7.1%, respectively.

European equity markets traded mostly higher this month, with Germany’s XETRA DAX and Sweden’s OMX Stockholm 30 up 6.4% and 5.9%, respectively. Tecan shares gained the most for the month, climbing 4.5% and 26.1% year to date, before closing at CHF 200.40 ($207.00 at CHF 0.97=$1). Sweden’s Biotage closed at SEK60.75 ($7.47 at SEK 8.14=$1), increasing 3.0% for the month. Germany’s Merck KGaA share price grew 2.1% for the month to €94.40 ($111.59 at €0.85=$1) but is down 4.8% year to date. The company’s shares rose to a monthly high of €100.06 on September 27, before finishing the month with a 5.6% slide from the peak.

The UK’s FTSE 100 traded lower, down 0.8% from last month. London shares in the Index decreased overall, with Oxford Instruments dipping the most, by 7.6%. Oxford Instruments closed at £9.70 ($13.00 at £0.75=$1) for the month, increasing 32.4% year to date. Conversely, Spectris gained the most, up 4.1%, to close at £24.10 ($32.29) for the month. Horizon Discovery’s shares fell 7.0% to £2.27 ($3.04) for the month in accordance with its most recent quarterly earnings report (see Bottom Line). The company’s operating profit, along with net income, continued to slide for the fiscal half-year, prompting a 4.6% decrease in share price since the earnings release on September 26.

ibo table

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