Trade-Ideas: Thermo Fisher Scientific (TMO) Is Today's

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Thermo Fisher Scientific ( TMO) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified Thermo Fisher Scientific as such a stock due to the following factors:

  • TMO has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $208.3 million.
  • TMO has traded 1.2 million shares today.
  • TMO traded in a range 244.3% of the normal price range with a price range of $3.82.
  • TMO traded above its daily resistance level (quality: 60 days, meaning that the stock is crossing a resistance level set by the last 60 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

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More details on TMO:

Thermo Fisher Scientific Inc. provides analytical instruments, equipment, reagents and consumables, software, and services for research, manufacturing, analysis, discovery, and diagnostics in the United States and internationally. The stock currently has a dividend yield of 0.5%. TMO has a PE ratio of 28.6. Currently there are 12 analysts that rate Thermo Fisher Scientific a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for Thermo Fisher Scientific has been 1.8 million shares per day over the past 30 days. Thermo Fisher Scientific has a market cap of $47.4 billion and is part of the health care sector and health services industry. The stock has a beta of 1.27 and a short float of 0.8% with 1.83 days to cover. Shares are up 8.2% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Thermo Fisher Scientific as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, growth in earnings per share, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • TMO's revenue growth has slightly outpaced the industry average of 25.4%. Since the same quarter one year prior, revenues rose by 30.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • THERMO FISHER SCIENTIFIC INC has improved earnings per share by 34.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, THERMO FISHER SCIENTIFIC INC increased its bottom line by earning $3.49 versus $3.44 in the prior year. This year, the market expects an improvement in earnings ($6.91 versus $3.49).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Life Sciences Tools & Services industry average. The net income increased by 48.5% when compared to the same quarter one year prior, rising from $317.60 million to $471.60 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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