For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in Thermo Fisher Scientific (TMO) ten years ago? It may not have been easy to hold on to TMO for all that time, but if you did, how much would your investment be worth today?
Thermo Fisher Scientific's Business In-Depth
With that in mind, let's take a look at Thermo Fisher Scientific's main business drivers.
Headquartered in Waltham, MA, Thermo Fisher Scientific is a scientific instrument maker and a world leader in serving science. In Nov 2006, Thermo Fisher Scientific, Inc. was formed through the merger of Thermo Electron Corporation with Fisher Scientific International Inc. On Feb 3, 2014, Thermo Fisher acquired Life Technologies Corporation.
Following the acquisition, the new reporting segments are:
Life Sciences Solutions Segment: This segment (39.9% of total revenues in 2021) was added post the acquisition of Life Technologies. It incorporates majority of the former Life Technologies and Thermo Fisher’s Biosciences businesses. In 2021, this business registered growth of 28.5% from 2020.
Analytical Instruments: Formerly known as Analytical Technology, this segment (15.5%) has been renamed in order to reflect the transfer of the bioprocess production business to the newly formed Life Sciences Solutions Segment. In 2021, this business registered growth of 18.4% from 2020.
Specialty Diagnostics (SD): This segment (14.4%), formed after the acquisition of Phadia, serves customers in healthcare and clinical laboratories with a portfolio of diagnostic test kits, reagents and instruments used to increase the speed and accuracy of diagnoses to improve patient care. In 2021, this business registered growth of 5.9% from 2020.
Laboratory Products and Biopharma Services: Formerly known as Laboratory Products and Services, this segment (37.9%) has been renamed to to reflect the inclusion of the PPD acquisition. PPD will be referred to as clinical research business within this segment. This segment serves laboratory customers with equipment and consumables that improve productivity and a range of BioPharma outsourcing services. This segment also includes the company’s research and safety market customer channels. Post-acquisition, Thermo Fisher’s Global Chemicals business has moved to the Laboratory Products and and Services Segment. In 2021, this business registered growth of 21.4% from 2020.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Thermo Fisher Scientific, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in November 2012 would be worth $8,800.29, or a 780.03% gain, as of November 28, 2022, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 185.71% and gold's return of -2% over the same time frame.
Analysts are forecasting more upside for TMO too.
Thermo Fisher exited the third quarter of 2022 with better-than-expected results. The robust year-over-year revenue growth in the Analytical Instruments and the Laboratory Products and Biopharma Services segments appears promising. Thermo Fisher’s accelerated investments to expand bioproduction capacity also buoy optimism. In the quarter, Thermo Fisher witnessed strength in three out of its four end markets. The upbeat guidance for 2022 is indicative that this growth momentum will continue. Thermo Fisher has outperformed its industry in the past year. However, the year-over-year decline in revenues in the Life Science Solutions and Specialty Diagnostics segment is disappointing. The contraction of both margins on escalating costs and expenses does not bode well either. The year-over-year decline in adjusted earnings is concerning.
Over the past four weeks, shares have rallied 9.41%, and there have been 10 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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