NYSE:TMO
$49.94
(3/15 4:00PM)
-0.4%
| Open | $50.11 |
Mkt Cap | $20.4 Billion |
| High | $50.25 |
52Wk High | $50.85 |
| Low | $49.48 |
52Wk Low | $30.83 |
| Volume | 3.1 Million |
Avg Vol 10D | 2.9 Million |
Ockham's Rating/Recommendation Summary
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TMO Revenue
Cash earnings is the most important factor in our analysis, but it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, TMO the high and low end of the Price to Sales per share ratios are 2.97x and 1.87x respectively.
Notice that TMO's current Price to Sales per share ratio is 2.03x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of $50.16, TMO is 16% below where we would expect to see it. This will beneficially factor into our final analysis of TMO as it is not often that this stock sinks to these levels.
TMO Cash Earnings
As a value investment framework, Ockham Research is similar to a private equity firm in terms of our valuation methods. We are always on the lookout for value in the form of sales and cash numbers. In the case of TMO, Ockham views their current Cash Earnings as significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for TMO, the current level of Cash Earnings compared to its historical levels helps identify where TMO is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 21.91 and a historical low Cash Earnings per share ratio of 13.81, an investor can relate where value becomes optimal.
So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for TMO? From the Ockham perspective, we are looking specifically at TMO to see if the market is recognizing the huge disparity between TMO's past stock price to Cash Earnings ratio to today's levels. At a difference of 30% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at TMO. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.
TMO Dividends
A strong dividend payment history is looked upon as a favorable characteristic on a company’s future and potentially can receive a positive Ockham rating. That being said, we don't require dividend payments for company's whose management has elected to forgo them entirely. TMO may pay a dividend at this time; however, there is an insufficient amount of history to incorporate it into our analysis. Therefore, we are not utilizing the dividends or lack thereof in our study. As TMO more consistent dividend history is made available, we will begin to factor this into the Ockham approach.
Check Out Squawk Box and News on TMO
Staying informed on the news is invaluable for investors, and RazorWire has captured a recently discussion on TMO from Squawk Box.
Based on our methodology, Thermo Fisher Scientific, Incorporated should hold some appeal to value investors as we view it as Undervalued. We noticed recently that in comparison to all other stocks we analyze in the news; TMO has received less coverage from the financial media in business television and blogs. Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey.
“… Last week there were -- last week there were reports of THERMO FISHER SCIENTIFIC had offered to buy the company for about the same price. Let's check on the futures right now. …”
Interest Builds in TMO as Countdown to the Closing Bell Rarely Covers It
It has been sometime since we noted a news story about TMO, which makes the news itself worthy of mentioning.
As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, TMO has been less covered in the news compared to the rest of our universe of stocks. We consider TMO as Undervalued at the current price of $47.91. According to our methodology, this stock has appreciation potential based on current fundamentals which only improves if earnings or revenue surprise. The Motley Fool CAPS data suggests that investors believe Thermo Fisher Scientific, Incorporated will beat the market in the foreseeable future.
“… THERMO FISHER SCIENTIFIC some takeover talks they're denying going to buy mill la por. Couple different wire services care reg that nonetheless mili por record high huge gain ... …”
Regulators and TMO Talked About On Street Smart With Carol Massar and Matt Miller
Street Smart With Carol Massar and Matt Miller talked recently regarding regulatory issues and Thermo Fisher Scientific, Incorporated, while these two issues may not be related we though it worth noting.
When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Thermo Fisher Scientific, Incorporated has actually sunk a bit in comparison to the others. Crowd sentiment is favorable on this stock, as measured by the Motley Fool CAPS survey. At present, Ockham has a valuation stance of Undervalued on TMO, as we could see significant price appreciation based on current fundamentals like cash earnings and revenue.
“… Bloomberg news has learned that THERMO FISHER SCIENTIFIC has made an unsolicited $6 billion takeover offer for millipore. Millipore has hired goldman sachs as a financial ... …”
News Breaking on Thermo Fisher Scientific, Incorporated on Street Smart With Carol Massar and Matt Miller
As always, the latest news on TMO is available to Ockham clients through RazorWire, and it was mentioned recently on Street Smart With Carol Massar and Matt Miller.
Crowd sentiment is leaning to the bearish side, according to the robust data set collected by the Motley Fool CAPS survey. We noticed recently that in comparison to all other stocks we analyze in the news; TMO has received less coverage from the financial media in business television and blogs. Based on our methodology, Thermo Fisher Scientific, Incorporated should hold some appeal to value investors as we view it as Undervalued.
“… THERMO FISHER SCIENTIFIC in an unsolicited $6 billion bid to buy millipore corp. ? It is a story we are breaking here at bloomberg. Zahra burton has the details. > > …”
Thermo Fisher Scientific, Incorporated (TMO) Discussed on CNBC's Mad Money
Thermo Fisher Scientific, Incorporated is in the news. Find out how this impacts TMO trading on Ockham Research.
Think that they settle. I think your latter point, kathy is probably right. You have to wait for them to settle. Let me give you a great example and it is a good company. A tmo. We liked them because they sell equipment to biotech and let's take the company that can service the control if we can get back to the ninth grade
“… ny that can service the control if we can get back to the ninth grade …”