Teledyne Technologies Incorporated TDY

The business

Teledyne makes instruments. Not one kind: infrared sensors for satellites and thermal cameras, machine vision systems that inspect semiconductor wafers, oceanographic instruments dropped off ships, environmental monitors, test equipment, and the electronics inside aircraft and missiles. Four segments, several hundred product lines, most of them number one or two in a niche too small for a large competitor to bother with.

The model is acquisition. Buy a family-owned instrument maker with good engineering and mediocre operations, apply the cost discipline, keep the brand, move on. Roughly $8.66B of goodwill is the cumulative purchase price of that strategy, and the returns show up as margin rather than as organic growth.