This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Real Winners of Drug Experimentation

A Diverse Business Model Pays

In the picks-and-shovels universe, Invitrogen and Sigma-Aldrich focus on chemicals and 'consumables,' the products that researchers use and then throw out. Some companies concentrate on instruments, and others offer a mixture.

Diversified companies include Qiagen, Applied Biosystems and the biggest publicly traded life-science tool company, Thermo Fisher Scientific. Its market cap of $23.7 billion is triple the size of Sigma-Aldrich. Created in 2006 by the merger of Thermo Electron and Fisher Scientific, the Waltham, Mass.-based giant has unanimous buy ratings by the 10 analysts polled by Thomson First Call.

Thermo "does not see an economic slowdown impacting the industry," says a February research report from Thomas Weisel Partners. Fourth-quarter results beat Wall Street expectations for the fifth consecutive quarter since the merger, says analyst Peter Lawson, who has an overweight rating. "Thermo's outlook for 2008 appears solid." He doesn't own shares; his firm says it expects to seek or receive investment-banking compensation from Thermo in the next few months.

Thermo takes diversification well beyond its peers, providing products and/or services not only for medical and scientific R&D but also for industries as varied as beverages, coal mining, petroleum, semiconductors, cement and metals.

"The company's diversified revenue base, which includes a large recurring stream of consumables routinely used in labs, lessens its exposure to pharmaceutical capital spending cycles," says Morningstar analyst Alex Morozov in a recent research report.

"It does not appear that recessionary fears have affected its U.S. business," Morozov adds. "Its Asia Pacific business is growing gangbusters."

However, with shares recently trading a just few dollars under Morningstar's fair value estimate of $59, Morozov breaks with the buy recommendations of sell-side analysts, by advocating a neutral three-star rating for Thermo.

3 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs