In this article, we will be discussing the best scientific instruments stocks to buy. Before we move on to our list, we will take a look at the market outlook for scientific instruments.
A scientific instrument is a device or tool used for scientific purposes, including the study of natural phenomena and theoretical research. These instruments are designed to facilitate theoretical research and are utilized to measure, analyze, and verify the properties of materials and elements. Scientists have worked in laboratories equipped with an ever-evolving array of scientific instruments for hundreds of years. In the 1990s, benchtop automation devices spurred a surge in productivity and discoveries, further enhanced by computerized networking in the 2000s and 2010s. Today, most pharmaceutical companies’ R&D labs remain at this advanced stage, featuring sophisticated centrifuges and stations that have been instrumental in making significant health advancements.
The global scientific instrument market reached $44.1 billion in 2023 and is projected to grow to $67.5 billion by 2032, with a compound annual growth rate (CAGR) of 4.7% during the period from 2024 to 2032. The primary driver of demand in the global scientific instrument market is the growth of the research and development sector. Additionally, increased collaboration between governments and manufacturers to equip government and university laboratories, as well as other research institutions, with the best instruments is expected to contribute to market growth. Furthermore, the integration of scientific instruments with computers enhances their functions, allows for parameter adjustments, and streamlines data sampling, collection, resolution, and analysis, thus further expanding the global demand for scientific instruments.
In addition, the scientific instruments market has been segmented into various categories. According to a report by Allied Market Research, the clinical analyzers segment is projected to generate the highest revenue from 2021 to 2030. This growth is driven by the increasing adoption of point-of-care testing devices and laboratory automation, as well as the rise in chronic conditions requiring clinical analyzers for diagnosis. Additionally, the research segment is anticipated to experience the fastest compound annual growth rate. This is due to the rising demand for scientific instruments in the research of chronic conditions such as cardiovascular diseases, cancer, and neurological diseases, along with the development of advanced instruments for research purposes.
Science heavily relies on technology, and without sophisticated instruments designed to meet the demands of experiments and test new or existing theories and models, scientific progress would stall. A prime example is the life sciences industry, which has produced groundbreaking innovations such as COVID-19 vaccines, cancer immunotherapies, glucose monitors, and pacemakers. Another emerging trend is the use of AI in laboratories. According to a report, the global life science analytics market size is projected to grow from $15.27 billion in 2023 to $43.86 billion by 2032, at a compound annual growth rate (CAGR) of 11.8%. Another growing trend comes in the form of Generative AI (gen AI), which is set to revolutionize nearly every aspect of the life sciences, and in turn, the scientific instruments sector. According to McKinsey, gen AI could create $60 billion to $110 billion in annual economic value for pharmaceutical and medtech companies, with $18 billion to $30 billion of that value coming from commercial functions alone.
With these details in mind, we will now take a look at the best scientific instruments stocks to buy.
A scientist in a lab coat studying a petri dish through a microscope.
Our Methodology
To compile the list of the best scientific instruments stocks to invest in, we focused on companies listed on the New York Stock Exchange and Nasdaq that are involved in the scientific instruments industry. The stocks were ranked according to Insider Monkey’s database, which tracks 919 hedge funds as of the end of Q1 2024. The ranking is based on the ascending order of the number of hedge fund investors in each stock. Why are we interested in the stocks that hedge funds pile into? The reason is simple, our research has shown that we can outperform the market by imitating the top stock picks of best hedge funds. Our quarterly newsletter’s strategy picks 14 small and large-caps every quarter and it has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
8. Mirion Technologies, Inc. (NYSE:MIR)
Number of Hedge Fund Holders: 24
Mirion Technologies, Inc. (NYSE:MIR) provides an extensive array of products and services for the detection, measurement, analysis, and monitoring of radiation. The company operates through two primary segments: Medical and Industrial, each specializing in distinct areas. Mirion Technologies, Inc. (NYSE:MIR) serves a diverse clientele, including healthcare facilities, research laboratories, military organizations, reactor design firms, and nuclear power plants.
In April, Citi reaffirmed its Buy rating and $14.00 price target for Mirion Technologies, Inc. (NYSE:MIR), indicating confidence in the company’s future growth prospects. The firm believes that Mirion Technologies, Inc. (NYSE:MIR) stands to benefit from increased orders and a robust year-end backlog from the nuclear sector, potentially enhancing its first-quarter 2024 revenues and earnings. Citi also expects improved operational execution to contribute to expanded profit margins for Mirion.
In addition, May brought more good news to Mirion Technologies, Inc. (NYSE:MIR) as the company reported its first-quarter earnings, posting an EPS of $0.06, which met analyst expectations, while its revenue for the quarter reached $192.6 million, surpassing the consensus estimate of $189.39 million.
As of the end of the first quarter of 2024, 24 hedge funds out of the 919 funds tracked by Insider Monkey had stakes in Mirion Technologies, Inc. (NYSE:MIR). Leon Cooperman’s Omega Advisors emerged as the company’s largest shareholder as it owns a $85.42 million stake in MIR.
Meridian Small Cap Growth Fund stated the following regarding Mirion Technologies, Inc. (NYSE:MIR) in its fourth quarter 2023 investor letter:
“Mirion Technologies, Inc. (NYSE:MIR), a global leader in ionizing radiation measurement and detection, provides mission-critical and, in many cases, lifesaving technologies within the industrial (nuclear power) and medical (nuclear medicine and radiation therapy) sectors. Our investment in Mirion is predicated on three primary factors. First, the company operates in industries with strong secular trends. Second, approximately 75% of the company’s revenues are recurring or replacement, providing valuable transparency and predictability. Finally, the company competes in relatively fragmented markets, which leads to higher switching costs and strong pricing power. During the quarter, the stock advanced as the company reported 17% organic growth, significantly better than expected. The report added to investors’ confidence that growth may exceed management’s previously stated full-year revenue guidance of between 6-8%. We also have been encouraged by management’s disciplined capital allocation decisions, as the company has selectively acquired high-quality companies at attractive prices, while at the same time reducing leverage on its balance sheet. During the quarter, we maintained our position in Mirion and will continue to monitor valuation closely from here.”
7. Fortive Corporation (NYSE:FTV)
Number of Hedge Fund Holders: 37
Fortive Corporation (NYSE:FTV) specializes in designing, developing, manufacturing, marketing, and servicing professional and engineered products, software, and services. Within its Intelligent Operating Solutions segment, Fortive provides advanced instrumentation, including electrical test and measurement tools.
For Q1 2024, Fortive Corporation (NYSE:FTV) reported revenues of $1.52 billion, marking a 4% year-over-year increase, with core revenue growth at 3%. This performance underscores the company’s robust business model and effective execution of the Fortive Business System (FBS), which continues to drive innovation and operational excellence. The reported net earnings were $207 million, with an adjusted figure of $295 million after accounting for a $63 million gain from property sales in the Precision Technologies Segment.
Encouraged by this strong quarterly performance, Fortive Corporation (NYSE:FTV) has raised its full-year 2024 outlook. The company now projects GAAP diluted EPS to be between $2.61 and $2.70 and adjusted diluted EPS to range from $3.77 to $3.86, indicating a potential year-over-year increase of up to 13%.
As of the end of Q1 2024, 37 out of 919 hedge funds tracked by Insider Monkey had invested in Fortive Corporation (NYSE:FTV). Andreas Halvorsen’s Viking Global was the largest investor, holding a $816.95 million stake.
6. Agilent Technologies, Inc. (NYSE:A)
Number of Hedge Fund Holders: 37
Agilent Technologies, Inc. (NYSE:A) delivers specialized solutions for the life sciences, diagnostics, and applied chemical markets globally. Its Life Sciences and Applied Markets segment features an array of instruments and systems, such as liquid chromatography, mass spectrometry, gas chromatography, atomic absorption, and microwave plasma-atomic emission spectrometry instruments.
Earlier this May, Agilent Technologies, Inc. (NYSE:A) reported its second quarter earnings results, with revenue coming in at $1.57 billion, marking an 8.4% decline on a reported basis and a 7.4% decrease on a core basis compared to the same quarter in 2023. The company’s GAAP net income for the quarter was $308 million, or $1.05 per share, up slightly from $302 million, or $1.02 per share, while its Non-GAAP net income came in at $356 million, or $1.22 per share, down from $377 million, or $1.27 per share, in the prior year. Additionally, Agilent Technologies, Inc. (NYSE:A) has revised its full-year revenue outlook to a range of $6.420 billion to $6.500 billion, representing a decrease of 6.0% to 4.9% on a reported basis and a decline of 5.4% to 4.3% on a core basis.
Analyst ratings for Agilent Technologies, Inc. (NYSE:A) have been mixed following these announcements. Goldman Sachs maintained its Buy rating on the stock with a price target of $145.00, viewing the guidance update as a potential early indicator of challenges for other companies with significant exposure to China and the instrument sector. Conversely, BofA Securities lowered its price target to $134 from $145, maintaining a Neutral rating on the company. The firm cited slower-than-expected order acceleration and expressed skepticism about a rebound in the second half of the fiscal year.
As of the end of the first quarter of 2024, 37 hedge funds tracked by Insider Monkey held stakes in Agilent Technologies, Inc. (NYSE:A), a slight decline from the 39 hedge funds in the previous quarter.
5. Teledyne Technologies Incorporated (NYSE:TDY)
Number of Hedge Fund Holders: 39
Teledyne Technologies Incorporated (NYSE:TDY) offers innovative technological solutions that propel growth in global industrial markets. The company’s Instrumentation segment focuses on delivering monitoring and control instruments utilized in marine, environmental, industrial, and various other applications.
Teledyne Technologies Incorporated (NYSE:TDY) faced a shift in market expectations following a downgrade by BofA Securities. The firm lowered Teledyne’s rating from Buy to Neutral and reduced the price target from $490 to $400. This adjustment came after Teledyne’s results diverged from the anticipated “beat-and-raise” scenario, instead delivering a “miss-and-cut” outcome that surprised investors. A significant factor in this revision was a slowdown in Teledyne’s Digital Imaging unit, the company’s largest revenue contributor, which accounts for approximately 50% of total revenue.
The decline in the company’s Digital Imaging unit, known for its short lead-time purchase process, prompted Teledyne Technologies Incorporated (NYSE:TDY) to revise its earnings per share outlook for 2024, with the company now projecting EPS in the range of $19.25 to $19.45, down from the previously forecasted range of $20.35 to $20.65.
As of the end of the first quarter of this year, a survey by Insider Monkey of 919 hedge funds revealed that 39 had invested in Teledyne Technologies Incorporated (NYSE:TDY). The largest stakeholder among them is Select Equity Group, led by Robert Joseph Caruso, with holdings valued at $527 million.
4. Mettler-Toledo International Inc. (NYSE:MTD)
Number of Hedge Fund Holders: 42
Mettler-Toledo International Inc. (NYSE:MTD) is a global manufacturer and marketer of precision instruments for use in laboratory, industrial, and food retailing applications. The company reported a modest rise in adjusted earnings per share (EPS) for the first quarter of 2024, with the instrument supplier announcing an adjusted EPS of $8.89, marking a 2% increase from $8.69 in the same quarter last year and surpassing analyst estimates of $7.65. Revenue for the quarter remained steady at $925.9 million, outperforming the consensus estimate of $879.72 million.
Looking forward, Mettler-Toledo International Inc. (NYSE:MTD) projects a 4% decline in local currency sales for the second quarter of 2024, with adjusted EPS expected to range between $8.90 and $9.05, reflecting an 11% to 13% decrease. This guidance accounts for an estimated 2% negative impact from adverse currency conditions. For the full year, the company anticipates a 2% increase in local currency sales and an adjusted EPS between $39.90 and $40.40, indicating a growth of 5% to 6%.
Following these results, Stifel raised its price target for MTD shares to $1,510.00 from $1,270.00, while maintaining a Buy rating. Stifel anticipates that Mettler-Toledo International Inc. (NYSE:MTD)’s capacity for mid-single-digit organic growth next year could facilitate an EPS increase of 15% or more. This projection suggests a promising growth trajectory for the company’s stock as the year progresses.
As of the end of the first quarter of 2024, Insider Monkey’s tracking data showed that 42 out of 919 hedge funds held stakes in Mettler-Toledo International Inc. (NYSE:MTD). The largest stakeholder among them was Terry Smith’s Fundsmith LLP, with a $812.2 million investment.
3. Roper Technologies, Inc. (NYSE:ROP)
Number of Hedge Fund Holders: 43
Roper Technologies, Inc. (NYSE:ROP) specializing in designing and developing software, as well as technology-enabled products and solutions, recently declared a dividend of $0.75 per share, scheduled for distribution on July 22 to stockholders of record as of July 8. The company also reported strong growth for the first quarter of 2024, with total revenue up by 14%, organic revenue by 8%, and EBITDA by 16%. Additionally, Roper Technologies, Inc. (NYSE:ROP) managed to complete the acquisition of Procare Solutions for $1.75 billion, which is expected to add $20 million in revenue. In light of these positive developments, the company has raised its full-year 2024 guidance, now projecting total revenue growth of 12% and organic revenue growth of 6%.
However, some analysts remain cautious about Roper Technologies, Inc. (NYSE:ROP)’s future performance. Wolfe Research recently downgraded the stock from Outperform to Peer Perform, aligning its valuation with other vertical software industry peers. Looking ahead, Wolfe Research notes that the company’s capital deployment strategy could significantly impact the stock’s performance, with the firm estimating that Roper Technologies, Inc. (NYSE:ROP) has over $5 billion in surplus capital available through the end of 2025, which could act as a catalyst for the stock.
By the end of the first quarter of this year, 43 out of the 919 hedge funds tracked by Insider Monkey held stakes in Roper Technologies, Inc. (NYSE:ROP). The largest stakeholder among them was Akre Capital Management, with a $866.3 million investment.
2. Danaher Corporation (NYSE:DHR)
Number of Hedge Fund Holders: 98
Founded in 1984 by brothers Steven and Mitchell Rales, Danaher Corporation (NYSE:DHR) is a diversified American conglomerate headquartered in Washington, D.C. The company specializes in designing, manufacturing, and marketing medical, industrial, and commercial products and services, operating through three distinct segments: Life Sciences, Diagnostics, and Environmental & Applied Solutions.
Danaher Corporation (NYSE:DHR) reported a strong start to 2024, with first-quarter revenue, earnings, and cash flow surpassing expectations. Q1 2024 revenue reached $5.8 billion, though core revenue declined by 4%. The company maintained a gross profit margin of 60% and an adjusted operating profit margin of 30.1%, with adjusted diluted net earnings per share at $1.92. Additionally, the company’s bioprocessing business is projected to achieve high single-digit growth by year-end, while the Diagnostics segment saw a core revenue increase of 7.5%.
Following Danaher Corporation (NYSE:DHR)’s first-quarter earnings report, Baird expressed a positive outlook on the company, raising the stock’s price target to $271 from $259 and reiterating an Outperform rating. Despite the better-than-anticipated results, Danaher Corporation (NYSE:DHR) has chosen to maintain its guidance for the full year 2024, with Baird suggesting that this decision may indicate a degree of caution. Nonetheless, the medium-term outlook for DHR remains positive.
As of the end of the first quarter, 98 out of 919 hedge funds tracked by Insider Monkey held stakes in Danaher Corporation (NYSE:DHR). The largest stakeholder during this period was Boykin Curry’s Eagle Capital Management, with a $1.8 billion investment. The stock ranks among the top 3 on our list of the best scientific instruments stocks to buy.
RGA Investment Advisors stated the following regarding Danaher Corporation (NYSE:DHR) in its first quarter 2024 investor letter:
“In our Q3 2023 commentary, we featured a section on our investment in Danaher Corporation (NYSE:DHR) entitled “Purity in the Crown Jewel of Bioprocessing.” Specifically, we were speaking to Cytiva, Danaher’s bioprocessing business formed by the merger of Pall Corp and GE’s bioprocessing division. We will not repeat the features that attract us to bioprocessing in general, nor the elements of timeliness, though we will emphasize that our confidence in timeliness has actually increased since writing that piece. While Danaher has performed admirably ever since, its peer Sartorius, which was referenced by labeling bioprocessing “an oligopolistic market, with a small number of critical players and extremely high barriers to entry.”
1. Thermo Fisher Scientific Inc. (NYSE:TMO)
Number of Hedge Fund Holders: 110
Headquartered in Waltham, Massachusetts, Thermo Fisher Scientific Inc. (NYSE:TMO) is a leading American provider of analytical instruments, life sciences solutions, specialty diagnostics, and laboratory, pharmaceutical, and biotechnology services. The company was formed in 2006 through the merger of Thermo Electron and Fisher Scientific.
For the latest quarter, Thermo Fisher reported adjusted earnings per share of $5.11, surpassing analysts’ estimate of $4.71. Revenue also exceeded expectations, reaching $10.34 billion compared to the consensus estimate of $10.16 billion. Looking ahead, Thermo Fisher has raised its full-year 2024 guidance, now anticipating revenue between $42.3 billion and $43.3 billion and adjusted EPS ranging from $21.14 to $22.02. The midpoint of the adjusted EPS guidance is $21.58, slightly above the consensus of $21.53, while the midpoint of the revenue guidance, $42.8 billion, is slightly below the consensus estimate of $42.83 billion.
Deutsche Bank recently increased its price target for Thermo Fisher Scientific Inc. (NYSE:TMO) to $610 from the previous $600, maintaining a Buy rating on the stock. This adjustment reflects a positive outlook on the company’s bioprocessing segment, which has shown strong order growth and a rising book-to-bill ratio. However, the firm also highlighted potential downside risks, including a slowdown in demand for bioprocessing products, challenges in replacing revenue from COVID-19 related business, and possible business disruptions due to geopolitical instability or quarantine policies.
As of the end of the March quarter, 66 hedge funds reported owning stakes in Thermo Fisher Scientific Inc. (NYSE:TMO). The largest stakeholder during this period was Ken Fisher’s Fisher Asset Management, which holds a $1.45 billion stake in the company. The stock takes top place on our list of the best scientific instruments stocks to buy.
Polen Focus Growth Strategy stated the following regarding Thermo Fisher Scientific Inc. (NYSE:TMO) in its first quarter 2024 investor letter:
“We increased our positions in Thermo Fisher Scientific Inc. (NYSE:TMO), Visa, Zoetis, Nike, and Abbott Labs. Each of these companies is durable and available at attractive valuations, in our view, for the growth we see ahead. In fact, in the case of ThermoFisher, Nike, and Abbott Labs, we expect accelerating earnings growth in the back half of 2024 after more difficult earnings growth periods pass for each of these companies. ThermoFisher and Abbott will finally wind down most of their COVID-19 testing and vaccine-related efforts due to a lack of demand, so these should no longer be revenue growth headwinds.”
While we acknowledge the potential of scientific instruments stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TMO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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