Is there anybody who does not like ThermoFisher (TMO)stock?

Thermofisher (TMO) has more fans than U2, Lady GaGa and Rihanna combined. Why is that? We are trying to find out.TMO is a life science tools conglomerate with revenues of $10.8B and Net Income of $1.036B for 2010. They are financial engineers adept at M&A, buying and selling companies and product lines to make their numbers. They sell virtually everything in every life science lab: scientific instruments,diagnostics,software, reagents etc.

For starters look at this:

  • Recent analyst opinions range from 9 strong buys, 7 buys and 1 hold.It is the second most favorite healthcare stock.
  • Revenue estimates  are in the $11.5B range for 2011 with an EPS above $4, a 14.3% increase above 2010 with a PE of 13.69 compared to a current PE of  21.85. The forecasted PEG puts the stock in the value category at 1.13.
  • Cash flow from operations have been up the last three quarters from $283M to $438M but a lot of free cash flow has gone to purchase stock($165M to $325M).
  • The 52 week range for the stock is $41.74-$58.16 but the stock is flat over one year. Over five years the stock is up 49.2% vs 2.78% for the S&P 500 and 19.6% for the NASDAQ Index.
  • The institutional ownership is 91%.
  • Even the blogs love it with no detractors and every financial pundit recommending the stock.
  • The shareholder equity is flat over the last 4 quarters at about $15.4B.
  • Agilent (A) is a comparable at $15.7B market cap vs $21.6B for TMO. Danaher (DHR) who recently acquired Beckman(BEC)  is also a comparable at $34.4B.
  • The Company does not pay a dividend.

Is ThermoFisher a growth stock or  a value stock and what is the long term strategy? We’ll find out more after the Q1 2011 earnings report. We are also trying hard to find a contrary opinion.

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