4. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 108
5-Year Average Annual Revenue Growth Rate: 11.23%
5-Year Average Payout Ratio: 7.47%
Thermo Fisher Scientific Inc. (NYSE:TMO) ranks fourth on our list of the best stocks to buy for medium term. The American biotech and life sciences company offers a wide range of related products and services to its consumers. The stock has risen by 14% since the beginning of 2024, consistently benefiting from its acquisition strategy. Recently, it finalized its acquisition of Olink, a provider of advanced proteomic solutions. This acquisition enhances the company’s capabilities and strengthens its leadership in protein research. It allows customers to significantly speed up discoveries and scientific breakthroughs while advancing the goals of precision medicine.
In the second quarter of 2024, Thermo Fisher Scientific Inc. (NYSE:TMO) reported revenue of $10.5 billion, which showed a slight decline of 1.3% from the same period last year. However, the revenue beat analysts’ estimates by $23.4 million. The company’s steadfast focus on research has established it as a leading entity in the eyes of analysts. Generation Investment Management also highlighted this in its Q4 2023 investor letter:
“In each quarterly letter we share examples from the portfolio that bring our investment process to life. This quarter we focus on Thermo Fisher Scientific Inc. (NYSE:TMO), a provider of healthcare products.
In recent years advances have accelerated. The large-scale use of mRNA vaccines during the COVID pandemic – the first major application of these vaccines – is just one example. Similar advances in drug development have allowed medicines to be developed for hard-to-treat diseases like Alzheimer’s, as well as to treat and perhaps cure diseases that previously eluded treatment.
To push innovation forward, researchers need tools to ask the right questions, run experiments to test hypotheses and in turn draw insights. These tools encompass high-specification instruments, high-purity reagents, powerful software and a variety of specialised services. An ecosystem has developed of companies that specialise in providing these tools. We often think of them as providing the ‘picks-and-shovels’ to researchers who are mining for the gold once obscured by nature…” (Click here to read the full text)
Thermo Fisher Scientific Inc. (NYSE:TMO)’s balance sheet is strong and has solid cash generation. In Q2 2024, the company reported an operating cash flow of $1.96 billion, up from $1.54 billion in the prior year period. Its free cash flow also grew to $1.7 billion, from $1.26 billion in the same period last year. On July 11, the company declared a quarterly dividend of $0.39 per share, which was in line with its previous dividend. The stock’s dividend yield on September 19 came in at 0.25%.
Thermo Fisher Scientific Inc. (NYSE:TMO) was a part of 108 hedge fund portfolios at the end of Q2 2024, compared with 110 in the previous quarter, as per Insider Monkey’s database. The stakes owned by these hedge funds have a total value of over $8.56 billion. Ken Fisher’s Fisher Asset Management was the company’s leading stakeholder in Q2.
