Thermo Fisher Scientific (TMO-N)

They delivered today a strong earnings and revenue beat as they raised their full-year forecast. Thinks this the last quarter of revenue shrinkage before it gets a major rise in the second half of 2024.

Subdued returns. A leader, critical player in its sector. Stock's lagged due to inventory destocking, higher interest rates, and softer Chinese economy. These issues are largely resolved.

It is the leading company for testing new drugs. It has grown from acquisitions and is now growing at a rate of 5 to7% a year. Buy and hold.

Higher interest rates saw weaker funding in biotech. China had weak demand, though only about 8% of revenues. Still likes it long term for a picks and shovels play.

Avoid TMO because their revenues are flattening. Both trade at a high PE. BDX hasn't done much in share movement. He'd rather pay more for Boston Scientific which performs better.

Not a major growth company, but will grow steady. ~7% top line growth expected to continue. ~10% share price appreciation expected going forward. Will continue to hold in portfolio. 

It's retraced a big move, so it's buying opportunity.  Healthcare services technology is great place to be.

Last week, they reported strong earnings and an in-line full-year forecast, but stocks fell nearly 5%. That was a sell-the-news reaction, he thinks. Management said that 2023 was their transition year when they unwound excess inventory and 2024 is their recovery year, particularly in the second half. Buy it now. Macro trends: he thinks we're starting a huge innovation cycle in pharma in weight-loss drugs among others, all helped by generative AI. Biopharma is entering a red-hot period after years of pain.

He bought this in mid-2023 on a dip. It's been consolidating the healthcare space for the last 10 years. Are #1 in this space. He expects sales and their PE to improve.

She bought in summer, stock's not done too much, so it gets to be a Top Pick again. Vast array of picks and shovels to the healthcare industry. Reduced guidance a couple of times, very unusual for them: weakness in China, general caution in spending, and Covid-double-ordered inventory destocking. Likes long-term fundamentals of healthcare industry, and TMO will participate. Yield is 0.3%.

Is up 11% in the past month. Their customers have finished clearing out their excess inventory after a year. Better US-China relations means more sales for TMO.

TMO is a leader in life sciences and diagnostics. He recently added. The entire sector has some over-supply. This is the bottom of the cycle. Lower risk, less upside, more diversified. Historically, good at acquisitions. Good long-term hold, but right now it's all about waiting for funding to come back to the sector.

When the cycle turns, both will do well and will probably outperform.

It is the leading global player in life sciences and tools. It provides drug companies, pharmaceuticals and labs and in fact is vital to the pharmaceutical industry in helping with drug development. The overhang is weakness in China and bio-tech companies but this should be a temporary headwind. With a good management team it is growing in the U.S. with several acquisitions. The pull back makes it a good time to buy for the long term.       Buy 21  Hold 6  Sell 1

Spend the last ~20 years consolidating scientific/diagnostics tools market.
Very strong demand for health care products.
Strong pipeline of R&D.
Expecting a 5-7% revenue growth & double digit earnings growth.
Great compounding business for long term shareholder.

Leader in technology in sectors that are solid but not hot. Largest player in devices needed for research. Successfully integrates acquisitions. Pick and shovels. Revenue growth of 8-10%. Not cheap, but foresees 10-15% growth per annum for 5-6 years. Yield is 0.26%.