NEW YORK (TheStreet) -- Affymetrix (AFFX) stock is up by 48.97% to $13.72 on heavy trading volume on Monday, after the company announced it was being acquired by Thermo Fisher Scientific (TMO) for $1.3 billion.
The Santa Clara, CA-based company, which provides cellular and genetic analysis products, will be acquired for $14 per share. Based in Waltham, MA, Thermo Scientific is a biotechnology product development company.
The deal, which will add 10 cents to Thermos Fisher's earnings in the first year, is expected to close by the end of the 2016 second quarter.
"Joining Thermo Fisher creates significant value for our customers, employees and shareholders," CEO Frank Witney said in a statement on Friday. "We will be able to build on our strong history of close collaboration with customers in our target markets by leveraging Thermo Fisher's deep relationships, particularly in biopharma, as well as their global scale and leading presence in Asia-Pacific."
Thermo Fisher stock is up by 2.16% to $137.06 in early-morning trading on Monday.
So far today, 14.02 million shares of Affymetrix have traded, versus the company's 30-day average of about 471,000 shares.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate AFFYMETRIX INC as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and unimpressive growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.38, is low and is below the industry average, implying that there has been successful management of debt levels. Along with this, the company maintains a quick ratio of 2.61, which clearly demonstrates the ability to cover short-term cash needs.
- Net operating cash flow has increased to $23.12 million or 11.71% when compared to the same quarter last year. In addition, AFFYMETRIX INC has also modestly surpassed the industry average cash flow growth rate of 7.02%.
- AFFYMETRIX INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AFFYMETRIX INC continued to lose money by earning -$0.07 versus -$0.27 in the prior year. This year, the market expects an improvement in earnings ($0.42 versus -$0.07).
- The share price of AFFYMETRIX INC is down 7.53% when compared to where it was trading one year earlier. This reflects both (a) the trend in the overall market as well as (b) the sharp decline in the company's earnings per share. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Life Sciences Tools & Services industry. The net income has significantly decreased by 323.8% when compared to the same quarter one year ago, falling from $2.38 million to -$5.34 million.
- You can view the full analysis from the report here: AFFX