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Thermo Fisher Scientific, Inc. Message Board

  • adubinsky adubinsky Mar 17, 1998 6:09 PM Flag

    dilution

    How big a deal is the dilution, percentage wise not too bad. I havent own tmo long but does tmo this often. The negative
    posts about the current leaderships have made me wonder. TMO still has strong earnings growth, won't that eventually bring up the
    share price? I've checked the EPS for the last 5 years and it shows consistent growth. Analysts are still high on the stock, 8
    strong buy and one hold. I'm patient, but I hope the stagnant share price will move up. Can anybody shed some light on the chances
    that tmo will return to its former glory.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • I am a minority owner of thermo
      electron,thermedics,thermo instruments and thermo quest for the past two and
      one half years. These holdings have been nothing
      short of a daily migraine headache. I applaud
      tao,barryway,data,waffle and others for their constructive criticsm and
      recommendations to the thermo board of directors. At first I did
      not believe hat this group was a "ponzi" scheme,when
      I first invested in these stocks;unfortunately,the
      facts suggest otherwise. The other bulletin boards
      document the lavish bonuses and options compounded by what
      is known as the interlocking hatsopoulos
      directorships. How mr wood could receive total compensation
      including bonuses north of $700,000 in 1997 is sadly a
      disgrace and insult to long term investors who watch their
      principal decrease while the insiders line their pockets as
      their companies flounder. What an insult to minority
      shareholders.

    • Stop the incessant dilution;cash stands at
      approximately $2.1 billion. Focus on bottom line results. Fix
      what is broken. When you repurchase shares,retire them
      like sgp,ibm,intc,pfe,mrk,etc. By retiring shares ,as
      opposed to the ceo trading shares,bottom line eps
      improves;over $300 million has been repurchased over the past
      two years and instead of improving the bottom
      line,the shares are placed into corporate trading
      accounts. The secondary effect is that by adopting a
      trading posture,this sustained action undermines investor
      confidence by reinforcing the notion that thermo is spinning
      out hyped companies as was the case with thermolases
      secondary at $25.50. Waste mngmt earned the reputation of
      spinning out companies as the means of conducting a short
      sale and thereby raising cheap capital;their
      credibility with both institutions and retail investors was
      tarnished. In summary,stop the dilution;stop the impending
      nonsense of "comprehensive income" and get back to basics.
      As for einsteins suggestion,much appreciated;the
      reality is that I have communicated to thermo at senior
      levels;but they do not chose to listen. The board ofcourse
      can read...and if they have difficulty accessing the
      internet then maybe coleman can assist any board member
      who requires help in getting on the internet. What
      one should not underestimate is the quality of
      comments that have surfaced on this board from many
      shareholders.

    • Hey Tao -- I hope you send your message where it
      will do the most good: to the actual Board of
      Directors. Posting grievances here does nothing. Nothing at
      all. It is as empty as reading Dilbert. You want
      change? You gotta make it happen.

    • Duff, turtle,jah and others correctly point out that a major issue facing the thermo group is CREDIBILITY. Investors who have been involved for over 5 years understand this;it's apparent in their thoughtful analysis. Sleuth, moralmgmt and others might want to take a step back and try harder to listen to their msg as opposed to hyping the tmo family. WE THINK HYPE IS THE LAST THING TMO & SPINOFFS NEED; CREDIBILITY AND CONSISTENT PERFORMANCE WOULD DO JUST FINE.

    • Dilution is usually a negative sign. Although in case of TMO, I think it creates a buying opportunity every time. There is a
      divergence going on in TMO (as I will explain) which is creating an opportunity for the rational minded. The divergence is that the
      stock is growing earnings per share faster than the market and is trading below market multiple. Also as the market rose last week
      the stock fell due to option trading influence and dilution effect sentiment. This created extra opportunity for long term (2-3
      years) holders. Why is dilution not bad in case of thermo? Look at a value line report for thermo. You will find that it has
      diluted ownership every single year for the last 11-12 years. But the stock has returned around 20% annually during this time. Why?
      Because earnings per share (which includes dilution) have grown at a 17% annual rate. In the latest earnings filings, CEO has stated
      that TMO is in best position ever. Therefore fundamentally the company is going in one direction (up) and technically due to
      temporary supply/demand sentiments, the price is going in another direction(down). To the astute, this is a mouth watering situation.
      Lucky are those who have the capital and rational to buy this stock as it goes lower in this divergent manner. Hope this helps
      allay your concerns!

      • 1 Reply to mrktwzzrd
      • to argue that dilution is "good or rational" is a new version of the thermo spin doctor! Lets set the record straight;
        earlier this year the ceo sold one third of his position at the 52 week high(44), and his brother the chairman sold $6 million in
        tmo stock shortly thereafter. Clearly they were informed, as were their bankers that tmo would be issuing 6-7 million shares in
        march; and that explains why the stock has gone down this year while the sp500 and djia go higher...the dow has "only" gone up 750
        points! Once again the insiders and the bankers benefit. Dilution is not good for existing shareholders any way you slice it. I
        think that should this market have a hiccup in april or may, then tmo at 33-34 would represent an attractive entry point. Making
        companies like tmo show fully diluted eps takes some spin out of the doctor.

 
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