Thermo Fisher: A Growing Company With An Acquisition Strategy

Mar. 01, 2019 11:00 AM ETThermo Fisher Scientific Inc. (TMO)2 Comments
Kurt Pollet profile picture
Kurt Pollet


  • Thermo Fisher is a profitable company with moderate debt levels.
  • The company’s earnings have shown strong growth over the last five years with more growth expected for 2020.
  • Management is proactive and will divest any business unit that underperforms and replace it with new acquisitions that have the potential to perform.
  • Thermo Fisher sees further growth opportunities in China.


Thermo Fisher Scientific Inc. (NYSE:TMO) is a global company in the medical research industry providing instruments, equipment and software. The company’s has shown solid growth over the years and more growth is forecast for 2020.

Management is proactive and seeks out opportunities. The company’s acquisition strategy is to look for businesses that will provide future growth and management will even divest its own business units if they underperform. Also, the company is expanding its operations in emerging markets as a means of boosting growth.

Over the long term I think that Thermo Fisher has the potential to grow well into the future along with its stock price.


Thermo Fisher has reported financial results for the fourth quarter of 2018 (data from Seeking Alpha and Gurofocus).

The company’s reported forth quarter revenue was up 7.6 percent and reported diluted earnings per share up 70 percent from the fourth quarter of 2017.

On an annual basis, revenue for 2018 was up 16 percent and diluted earnings per share up 29 percent from the 2017 fiscal year. Over the last five years Thermo Fisher’s revenue grew 9.6 percent per year and its earnings increased 11.3 percent per year.

Thermo Fisher’s return on equity is fair at 11 percent. Over the last five years its return on equity has mostly been just under 10 percent. The profit margin (profit to revenue ratio) is good at 12 percent. The profit margin has been fairly consistent over the last five years.

Thermo Fisher’s current ratio is 1.7 meaning that its current assets exceed its current liabilities. The current ratio has average 1.5 aver the last five years.

The asset ratio (total liabilities to total assets) is 51 percent which means that Thermo Fisher’s total debt is 51 percent of the value of everything the company owns (note

This article was written by

Kurt Pollet profile picture
Kurt Pollet has been involved in the stock market since 1986 and this long-term experience provides a broad perspective of the stock market and its performance. He operates the website and produces a newsletter that provides market analysis, strategies and stock picks.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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