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.