The power of time in investing
For most investors, the key factor in building long-term wealth is how much the price of a stock varies over time. It not only affects the performance of the portfolio but also allows the investor to compare choices within industries. And when it comes to holding stocks for the long term, few names in the world of science and healthcare shine as brightly as those of Thermo Fisher Scientific (TMO).
Understanding Thermo Fisher’s business
Headquartered in Waltham, Massachusetts, Thermo Fisher is a global leader in scientific instruments and services. It was born in 2006 from the merger of Thermo Electron Corporation and Fisher Scientific International. It is now a behemoth in four large end markets: pharmaceuticals and biotechnology, academia and government, industrial and applied sciences, and healthcare and diagnostics.
A significant milestone was reached in 2014, when Thermo Fisher acquired Life Technologies, with a solid biosciences and genetic analysis business included. More recently, in July of 2024, it further expanded by acquiring Olink, a next-generation proteomics solutions provider.
Revenue drivers by segment
Thermo Fisher divides its businesses into four major segments:
- Life Sciences Solutions (22.5% of 2024 revenue): This segment, centered around the Life Technologies acquisition, saw 3.5% less revenue in 2023.
- Analytical Instruments (17.4%): Handling precision lab instrumentation, this unit expanded 2.7% year over year.
- Specialty Diagnostics (10.5%): Built on diagnostic kits, reagents, and instruments, it rose 2.4%.
- Laboratory Products and Biopharma Services (54%): The largest segment, aided by the PPD clinical research acquisition, achieved 0.5% growth in 2024.
What $10,000 in TMO ten years ago would be worth today
Had you put $10,000 into Thermo Fisher stock ten years ago and not sold, the investment would have earned a substantial figure. The stock price of Thermo Fisher has compounded with consistent growth in its research services, acquisitions, and strong demand for pharma and biotech solutions. Even though the real return is calculated based on reinvested dividends and timing within the market, long-term investors would be holding a significant profit today.
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The role of FOMO in blue-chip stocks
Big-tech shares receive most of the FOMO (fear-of-missing-out) attention. But Thermo Fisher and similar players demonstrate that slow-and-steady expansion in diagnostics and life sciences can make as much long-term riches — without the steep rises and falls of more volatile sectors.
