Senior Portfolio Manager Jay Jackley of Compass Capital Management says Thermo Fisher Scientific Inc. (NYSE:TMO) is an example of how his firm has found value in the health care sector.
One of the names that we own is Thermo Fisher. Thermo Fisher Scientific is a well-run company that makes scientific testing equipment, and has single-digit organic revenue growth and consistent double-digit earnings growth.
They’ve had consistent margin expansion, and they have shown that they have a core competency doing mergers and acquisitions without any major missteps. They’ve bought companies that have added to their growth over time, including their $13.6 billion acquisition of Life Sciences in 2014.
Jackley says his firm bought Thermo Fisher in 2012 when the stock was around $50.
At that time, it was one of our bench stocks. We were looking at it during the budget sequestration, and because Thermo Fisher has some exposure to government spending, we thought it would be a good time to enter and were able to purchase shares at a cheap price.
The management team executed well through that problem. Now Thermo Fisher is trading for about $135 a share. It is a company that has a consistent earnings growth pattern, and it was the right time to buy the stock.
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