Today, The Prudent Speculator Editor John Buckingham recommends selling a big
winner, and a recent SmallCapInvestor PRO recommendation may be acquired.
Sell Alert: Thermo Fisher Scientific, Inc. (TMO)
TMO was recommended by The Prudent Speculator at $44.69 in Investment Digest
issue 709, dated December 14, 2011.
“Wanting to raise a little cash in our portfolios and to take advantage of the near-
vertical advance in the price this year that has seen the shares tack on 30% after
they returned 43% last year, we decided to lock in our winnings on Thermo
Fisher Scientific, Inc. (TMO, NYSE). We sold our stake in the maker of scientific
instruments, consumables and chemicals at prices no lower than $83.43. ... While
the stock still had some distance between our sale price and our long-term Target
Price, we thought that Thermo’s recent hard-fought victory in the auction for gene
sequencing concern Life Technologies came at a hefty premium. Thermo agreed to
pay $13.6 billion, plus $2.2 billion in assumed debt, for Life Tech, trumping an $11
billion (not including debt) offer from a consortium of private equity investors. The
deal is still expected to be immediately accretive to Thermo’s earnings, but more
than a few folks found the price tag to be quite rich, especially as the buyout price
exceeded the high end of the ranges bandied about when Life put itself up for sale.
Thinking then that it might have made more sense for TMO to drop in price on the
merger news, rather than move sharply higher, we believed it prudent to free up our
Thermo money for future more undervalued purchases.”
John Buckingham, The Prudent Speculator, www.theprudentspeculator.com,
877-817-4394, 5/10/13