1. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 87
Thermo Fisher Scientific Inc. (NYSE:TMO) markets analytical instruments, specialty diagnostics, and laboratory products. The company has a growing biopharma business, driven by the purchase of PPD, that is expected to continue driving revenue in the coming months. The firm has opened a biologics manufacturing site in Switzerland and recently launched new versions of mass spectrometry and chromatography solutions that were received favorably at the market.
Morgan Stanley analyst Tejas Savant on October 28 resumed coverage of Thermo Fisher Scientific Inc. (NYSE:TMO) stock with an Overweight rating and a price target of $700, appreciating the strong earnings beat of the firm in the third quarter.
At the end of the second quarter of 2021, 87 hedge funds in the database of Insider Monkey held stakes worth $7.3 billion in Thermo Fisher Scientific Inc. (NYSE:TMO), up from 79 in the preceding quarter worth $6.2 billion.
In its Q2 2021 investor letter, DEVON Equity Management, an asset management firm, highlighted a few stocks and Thermo Fisher Scientific Inc. (NYSE:TMO) was one of them. Here is what the fund said:
“The broad response to the COVID pandemic from the healthcare, pharmaceutical, and life science industries has been nothing short of incredible.
Whilst Vaccine makers understandably garner the highest profile, Thermo Fisher (6.2% of NAV) should be considered one of the outstanding performers, reflected in their ‘COVID related revenue’ hitting US$9.4bn in the 12 months since March 2020 (we appreciate measuring ‘contribution’ to the pandemic by ‘dollars’ generated is a little crude – but ultimately it does tell us something).
Ever the short-termist, Mr Market has looked to the inevitable slowdown in COVID related revenue uneasily – questioning whether it might mean a decline in Earnings come 2022. These concerns resulted in TMO shares declining 5% since their November 2020 peak, the worst performer of our Top 10 holdings.
Fortunately, we look at the COVID dynamic for Thermo in the diametrically opposite fashion.
We think Thermo’s response to COVID has bolstered their competitive positon in multiple verticals, and meaningfully enhanced the long term earnings potential of the company:
Firstly, Thermo came from ‘also-ran’ to leading player in diagnostic testing in 6 months. In ordinary times, this might be expected to take 5+ years. As demand for COVID testing inevitably declines, the capacity Thermo built during 2020 will be filled with demand from non-COVID diagnostic tests, a fast growing area before the pandemic with improved prospects in light of the role testing is playing in the COVID response.
Secondly, Thermo invested heavily…”[read the entire letter here]
You can also take a peek at 10 Reddit’s WallStreetBets Meme Stocks Hedge Funds are Piling Into and 10 Biggest Hedge Fund Casualties of Reddit WallStreetBets’ Short Squeezes.
