Halma - Pay Up To Sleep Well At Night

“Defensive” doesn’t always mean “no growth”, and Halma (HLMA.L) (OTCPK:HLMLY) is certainly one of those companies that has built wide moats around its business and managed to maintain a healthy pace of growth through both organic expansion and M&A. Moreover, served markets like gas detection, explosion prevention, fire and elevator safety, ophthalmology, and water safety aren’t the sort of markets where demand just suddenly goes away because the economy turns.

Valuation is, of course, a challenge. Chances to buy Halma shares on the cheap are about as frequent as chances to buy Danaher (DHR) or Roper (ROP) at a discount (and for largely the same reasons), but the stock has at least provided 10% pullbacks on a pretty reliable basis. Trading at over 20x the estimated EBITDA three years forward there is no way Halma is conventionally cheap, but if you can make your peace with the different valuation rules in place here, I think this is a name to consider on a pullback.

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Halma - Pay Up To Sleep Well At Night