Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why Roper Industries' Shares Jumped

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of equipment maker Roper Industries (NYSE: ROP  ) jumped 10% this morning, only to see shares fall close to break even on a number of news items.

So what: First on the list is second-quarter earnings, where Roper said that revenue rose 4% to $725 million and an 8% rise in earnings to $115 million, or $1.15 per share. Revenue was a little light, but earnings were in line with expectations.

What had investors really enamored today was the announcement of a $1.4 billion cash purchase of Sunquest Information Systems, a medical and scientific software developer.

Now what: Management said the deal would be accretive and expects it to add $140 million in EBITDA in 2013. That's a big multiple to pay in the current economic environment, and it looks like investors curbed their enthusiasm later in the day.

The bottom line is that earnings were good but not great last quarter, and the acquisition announced today is fairly expensive. I'll pass on the bump and wait for enthusiasm to fade even more before jumping on this one.

Interested in more info on Roper Industries? Add it to your Watchlist.

Fool contributor Travis Hoium has no position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 30, 2012, at 6:21 PM, Buysider wrote:

    I don’t think you know Roper very well. Perhaps you should read the transcript of today’s earnings call and study the accompanying slides, then review Roper’s 20-year record of 20%-a-year growth in sales and EPS since its IPO in February 1992 before commenting further.

    A 2Q incremental margin of 59% on sales and a 2Q operating margin of 24.7% vs. 23.4% last year in a sluggish economy is “good but not great”? Roper is one of the most profitable “equipment” companies one can find, with a growing stable of dominant, niche, technology-based, software and software-driven industrial and commercial businesses, with very high margins, returns, and cash flow, that is acquiring a company with even higher margins than it already has (Sunquest’s EBITDA margin of about 60% on sales is roughly twice that of Roper's 29.5%).

    Considering what Sunquest brings to Roper, 10 times EBITDA is hardly expensive.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1964423, ~/Articles/ArticleHandler.aspx, 10/27/2016 10:46:48 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,176.53 -22.80 -0.13%
S&P 500 2,134.62 -4.81 -0.22%
NASD 5,240.97 -9.30 -0.18%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 10:30 AM
ROP $168.67 Down -1.07 -0.63%
Roper Technologies CAPS Rating: ****