Nanotechnology is a rapidly emerging technology with potential uses in many sectors, including healthcare, energy, and agriculture. For example, with the world facing its worst public health catastrophe in history, nanotech healthcare applications are helping create effective ways to identify, diagnose, treat, and prevent the spread of the coronavirus.
The increasing adoption of nanotechnology in medical diagnosis & imaging and other industries, and the emergence of self-powered nanotech devices are anticipated to drive the growth of the nanotechnology industry. Increasing government support should aid this growth. As a result, the global nanotechnology industry is expected to reach $33.63 billion by 2030, growing at a CAGR of $36.4%.
Given this backdrop, it may be prudent to bet on fundamentally sound nanotech stocks Thermo Fisher Scientific Inc. (TMO), Intel Corporation (INTC), Applied Materials Inc. (AMAT), and BASF SE (BASFY) as they are well-positioned to capitalize on the industry’s growth.
Thermo Fisher Scientific Inc. (TMO)
TMO is a scientific instrumentation and software service provisioner involved in developing and distributing various products under the brand names Thermo Scientific, Applied Biosystems, Invitrogen, Fisher Scientific, and Unity Lab Services. The company operated through four segments: Life Sciences Solutions; Analytical Instruments; Specialty Diagnostics; and Laboratory Products and Services.
This month, the U.S. Department of Defense (DoD) awarded TMO a $192.5 million contract to ensure consistent domestic manufacturing of pipette tips used in research and diagnostic labs to dispense precise amounts of liquid.
In July, TMO opened a new cGMP plasmid DNA manufacturing facility in Carlsbad, California, to meet the rapidly increasing demand for plasmid DNA-based therapies and mRNA-based vaccines. As plasmid DNA is increasingly being used as a therapeutic option in gene treatments and vaccinations, the company is well-positioned to see substantial growth in revenues in the upcoming months.
During the second quarter ended July 3, 2021, TMO’s revenue increased 34.1% year-over-year to $9.27 billion. The company’s operating income increased 55.5% year-over-year to $2.16 billion over this period. Its net income increased 58.1% year-over-year to $1.83 billion, while its EPS grew 59% from the prior-year quarter to $4.61.
The consensus EPS estimate of $22.16 for the current year represents a 13.4% improvement year-over-year. The consensus revenue estimate of $36.06 billion for 2021 represents an 11.9% increase from the same period last year. The stock has gained 36% over the past year and 22.1% year-to-date.
TMO’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its weighting.
TMO has also rated a B grade for Sentiment. Within the Medical – Diagnostics/Research industry, it is ranked #13 of 56 stocks.
To see additional POWR Ratings for Momentum, Value, Quality, Stability, and Growth for TMO, click here.
Intel Corporation (INTC)
INTC is a global technology company that develops, produces, and distributes cloud, smart, and connected device technologies for retail, industrial, and consumer applications. DCG; IOTG; Mobileye; NSG; PSG; CCG; and All Other are the operational segments of the company. Additionally, it has established a strategic relationship with MILA to develop and use artificial intelligence technologies for improving drug discovery.
Last month, the U.S. Department of Defense granted INTC a contract to offer commercial foundry services in the first phase of its multi-phase Rapid Assured Microelectronics Prototypes – Commercial (RAMP-C) program. Intel Foundry Services will establish and demonstrate a semiconductor IP ecosystem to develop and fabricate test chips on Intel 18A, INTC’s most advanced process technology, in collaboration with various industry leaders to support the U.S. government’s needs for designing and manufacturing assured integrated circuits.
INTC’s gross margin increased 6.7% year-over-year to $11.21 billion in the second quarter, ended June 26, 2021. The company reported an operating income of $5.55 billion, while its net income came in at $5.06 billion over this period. Its EPS totaled $1.24 over this period.
The company’s EPS is expected to grow at the rate of 10% per annum over the next five years. The stock has gained 7.6% over the past year and 7.2% over the past nine months.
INTC’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our POWR Ratings system. INTC also has an A grade for Value, and a B for Momentum and Quality. The stock is ranked #14 of 98 stocks in the A-rated Semiconductor & Wireless Chip industry.
Beyond the POWR Ratings grades I have just highlighted, you can see the INTC ratings for Stability, Sentiment, and Growth.
Applied Materials Inc. (AMAT)
AMAT provides manufacturing equipment, services, and software to the semiconductor, display, and related industries. The company operates through three segments Semiconductor Systems; Applied Global Services; and Display and Adjacent Markets.
This month, AMAT introduced new technologies and capabilities aimed at helping customers accelerate their heterogeneous chip design and integration technology roadmaps. In addition, the company aims to leverage its advanced packaging and large-area substrates leading technologies with industry partnerships to accelerate the availability of solutions that enhance power, performance, area, cost, and time to market.
Last month, AMAT introduced new solutions to assist the world’s leading silicon carbide (SiC) chipmakers in transitioning from 150mm to 200mm wafer manufacturing, which nearly doubles die output per wafer, to meet the world’s rising demand for premium electric vehicle powertrains.
For the third quarter ended August 1, 2021, AMAT’s net sales increased 41% year-over-year to $6.20 billion. Its operating income grew 19.3% year-over-year to $99 million over this period. The company’s net income surged 104% from the year-ago value to $1.72 billion, while its EPS increased 105% from the prior-year quarter to $1.87.
The consensus revenue estimate of $23.31 billion for the current year represents a 35.5% increase from the same period last year. AMAT’s EPS is expected to increase 64.3% year-over-year to $6.85 in fiscal 2021. Also, the stock has returned 144.6% over the past year and 53.7% over the past nine months.
AMAT’s POWR Ratings reflect this promising outlook. The company has an overall rating of B, which translates to Buy in our proprietary rating system. AMAT has also rated an A grade for Momentum, and a B for Quality. Within the same industry, it is ranked #37 of 98 stocks.
Click here to see additional POWR Ratings for Growth, Value, Sentiment, and Stability for AMAT.
BASF SE (BASFY)
Headquartered in Germany, BASFY operates as a chemical company worldwide. Chemicals; Materials; Industrial Solutions; Surface Technologies; Nutrition & Care; and Agricultural Solutions are the six operational segments of the company. In addition, it also has a strategic partnership with IntelliSense.io.
BASFY’s sales increased 56% year-over-year to €19.8 billion ($23.41 billion) in the second quarter ended June 30, 2021. Its EBIT grew significantly from the year-ago value to €2.4 billion ($2.84 billion). Moreover, the company’s sales for the chemical segment surged 91% year-over-year to €3.4 billion ($4.02 billion).
Analysts expect BASFY’s revenue to increase 23% year-over-year to $87.80 billion in fiscal 2021. In addition, the company’s EPS is expected to grow 68.3% in the current year. Over the past year, the stock has gained 17.7%
It is no surprise that BASFY has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The stock also has an A grade for Value, and a B grade for Stability and Quality. In the A-rated Chemicals industry, it is ranked #6 of 94 stocks.
In addition to the POWR Ratings grades I have just highlighted, you can see the BASFY ratings for Growth, Momentum, and Sentiment.
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TMO shares were trading at $572.58 per share on Friday afternoon, up $3.80 (+0.67%). Year-to-date, TMO has gained 23.07%, versus a 20.64% rise in the benchmark S&P 500 index during the same period.
About the Author: Pragya Pandey
Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...
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