In my December 8 guest post at Dividend Power, I outline how Thermo Fisher Scientific consistently creates shareholder value and why I think this is an opportune time to acquire shares despite its valuation is not as attractive as in late October/early November.
Thermo Fisher's share price can be volatile. Just before Christmas 2021, for example, TMO's share traded above $660. At the beginning of March 2022, however, the share price had plummeted to ~$530. In mid-July 2023, the share price was ~$560 but by late October 2023 it had dropped to ~$430. I last acquired shares in mid-November @ ~$445 and the share price is now ~$492 as I compose this post.
Market and business conditions may have changed within the past year. However, Thermo Fisher itself had not fundamentally changed. During these different timeframes, TMO remained an industry leader in providing life sciences solutions, analytical instruments, specialty diagnostics, and laboratory products and biopharma services in the United States and internationally.
Share price behaviour, however, does not always accurately reflect a company's true value.
Instead of fixating on share price behaviour, Warren Buffett and the late Charlie Munger (Berkshire Hathaway) repeatedly advise investors to:
- Buy businesses, not stocks;
- Look for companies with competitive advantages that can be maintained (economic moats);
- Focus on long-term intrinsic value, not short-term earnings;
- Demand a margin of safety;
- Be patient.
Naturally, we can never consistently buy at the 'low' and sell at the 'high'. If we follow their wisdom and advice, however, and invest in undervalued or fairly valued great companies for the long term, we at least have a reasonable probability of generating attractive long-term total returns.
I wish you much success on your journey to financial freedom!
Note: Please send any feedback, corrections, or questions to [email protected].
Disclosure: I am long TMO.
Disclaimer: I do not know your circumstances and do not provide individualized advice or recommendations. I encourage you to make investment decisions by conducting your research and due diligence. Consult your financial advisor about your specific situation.
I wrote this article myself and it expresses my own opinions. I do not receive compensation for it and have no business relationship with any company mentioned in this article.
