Thermo Fisher Scientific is a provider of analytical instruments, equipment, reagents and consumables, software and services for research, manufacturing, analysis, discovery and diagnostics. Markets served by Co. include pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, universities, research institutions and government agencies, as well as environmental and industrial process control settings. Co. serves its customers through its four brands: Thermo Scientific, Life Technologies, Fisher Scientific and Unity Lab Services. Co. has four business segments: Life Sciences Solutions; Analytical Technologies; Specialty Diagnostics; and Laboratory Products and Services.
TMO’s moat comes from an enormous manufacturing, sales, and distribution infrastructure and broad product offerings from scientific instruments and lab equipment to software and services. TMO markets itself as a one-stop shop for its research customers, an appealing feature for laboratories looking to simplify procurement functions. TMO has dominant positions within its product lines, particularly instrumentation. Its instruments have significant switching costs resulting from costly up-front investments in equipment (up to and exceeding $1 million) and training.
The company has been expanding of late. In addition to the Life Technologies (he largest acquisition in the company's history) purchase, Thermo Fisher launched a number of significant new products across its specialty diagnostics, analytical instruments, and life sciences businesses. This expansion has led to a more leveraged balance sheet. TMO now holds over $12.3 billion in long-term obligations. These shares are best suited for aggressive investors looking to outperform over the next six to 12 months.
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Diverse product portfolio
Broad customer base
Robust global footprint
Heavy dependence on third-party package-delivery services
Significant level of indebtedness
Rules and regulations by federal, state and foreign agencies
Healthcare reform law may affect results of operations
Strategic acquisition of Life Technologies Increased focus on Asian markets
Growing medical device market in the US
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