Solid fundamentals helping propel Thermo Fisher Scientific higher
Medical equipment provider Thermo Fisher Scientific (NYSE: TMO) has been trending higher for over two and a half years. Sure the stock pulled back in the fourth quarter of 2018, but even then it held up better than most stocks. One of the biggest reasons behind the rally has been good, consistent fundamentals.
Over the last three years the company has been able to grow earnings at a rate of 15% per year while sales have grown at a rate of 14% per year. In the most recent quarterly report, earnings increased by 11% while sales increased by 4%. Analysts expect the company to see earnings increase by 10% for 2019 as a whole while sales are expected to increase by 4.4%.
The company’s management efficiency measurements are above average as well with a return on equity of 17% and a profit margin of 21%.
The Tickeron Fundamental Analysis Overview shows a profit vs. risk rating of 9 for Thermo Fisher, indicating low risk on high returns. The average profit vs. risk rating for the industry is 75, placing this stock better than average.
The Tickeron Valuation Rating of 11 indicates that the company is seriously undervalued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization.
The daily chart shows that the stock has been trending higher since the end of December and there is a trend line connecting the lows from the last five months. The slope of the trend isn’t that high, but that seems to go along with the consistency of the fundamentals. The stock hasn’t rocketed higher and then fallen back, it has been on a consistent climb higher.
We see that the stock just recently hit the trend line again and that is the second time it has done so in August. The overbought/oversold indicators dropped in to oversold territory early in August and then reversed, but pulled back down again this past week. The daily stochastic readings made a bullish crossover on August 16 and that could be a good sign for the stock.
The stock also broke below its lower Bollinger band in early August and according to the Tickeron Technical Analysis Overview, in 22 of 31 cases where TMO's price broke its lower Bollinger Band, its price rose further in the following month. That puts the odds of a rally at 71% based on the past statistics.
Taking a look at the weekly chart we see that Thermo Fisher closed below its 52-week moving average for one week back in December and that is the only time the stock has done that in the last two and a half years.
The weekly stochastic readings have recently dipped below the 50 level for the first time since December and for only the seventh time in the last two and a half years. Almost all of the previous instances have marked good buying points for investors.
The sentiment toward Thermo Fisher is relatively bullish, but it seems to be warranted based on how well the company and stock have performed in recent years. There are 17 analysts following the stock at this time and 14 have it rated as a “buy”. There are also two “hold” ratings and one “sell” rating. This puts the overall buy percentage at 82.4% and that is above average.
The short interest ratio is at 1.9 currently and that is below average. This means that both analysts and short sellers are slightly more bullish toward Thermo Fisher than the average stock, but with the fundamental and technical picture, the bullish sentiment seems to be appropriate.
TMO's RSI Indicator ascends from oversold territory
The RSI Oscillator for TMO moved out of oversold territory on November 25, 2024. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 29 similar instances when the indicator left oversold territory. In of the 29 cases the stock moved higher. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 51 cases where TMO's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for TMO just turned positive on November 27, 2024. Looking at past instances where TMO's MACD turned positive, the stock continued to rise in of 45 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where TMO advanced for three days, in of 331 cases, the price rose further within the following month. The odds of a continued upward trend are .
TMO may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on December 17, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on TMO as a result. In of 93 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The 50-day moving average for TMO moved below the 200-day moving average on November 22, 2024. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where TMO declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for TMO entered a downward trend on November 29, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 88, placing this stock slightly better than average.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. TMO’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (4.713) is normal, around the industry mean (23.300). P/E Ratio (37.375) is within average values for comparable stocks, (83.485). Projected Growth (PEG Ratio) (2.868) is also within normal values, averaging (5.667). Dividend Yield (0.002) settles around the average of (0.018) among similar stocks. P/S Ratio (5.227) is also within normal values, averaging (43.338).
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
General Information
a developer of analytical and environment monitoring instruments
Industry MedicalSpecialties