< The 2015 All-America Research Team
Derik de Bruin
Bank of America Merrill Lynch
First-Place Appearances: 1
Total appearances: 6
Analyst debut: 2010
For a fourth year running, Derik de Bruin of Bank of America Merrill Lynch earns second place for his coverage of U.S. life science and diagnostic tools companies. He “knows the science extremely well and is able to explain even the most detailed technologies,” one investor relays. “This quality is rare on the Street and differentiates his research.” De Bruin, 51, advises that “sector performance has benefited from consolidation, including Danaher [Corp.’s] recent acquisition of Pall [Corp.]; improved pharmaceuticals industry spending; record levels of biotechnology funding; and a more optimistic outlook for federal funding for biomedical research in the U.S., due to programs such as the 21st Century Cures Initiative.” The shares outperformed the broad market by 8.8 percentage points during the 12 months through mid-September, climbing 6.2 percent, and he remains upbeat on the group — albeit more cautious on companies with higher levels of industrial exposure, owing to macro uncertainty in China. In addition, the researcher notes, “while there is bipartisan support to increase funding for the National Institutes of Health, these programs need to be paid for, so there is a risk if Congress does not act.” In large part thanks to the diversity of its product line, de Bruin is advising investors to buy Waltham, Massachusetts–based scientific equipment provider Thermo Fisher Scientific. “With its significant exposures to pharma, biotech, U.S. academic and government labs and the applied markets — such as food safety, environmental monitoring — as well as a reasonable [price-to-earnings] valuation relative to peers, we believe that Thermo shares will continue to outperform,” he says. The manufacturer also boasts consistent strategy and durable cash flows, he adds, and upside potential from capital-deployment events. “We believe Thermo is well positioned to achieve its core 2016 to 2018 financial model of 4 to 5 percent organic revenue growth and 75 basis points of annual operating margin expansion, and to deliver low-double-digit [earnings-per-share] growth,” the analyst concludes. His price target for the stock is $159; it closed at $125.78 in the middle of last month.