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BARGAIN GROWTH: Thermo Fisher Scientific
Ticker: TMO
Market Cap: $16.7 billion
PEG ratio: 0.99
Earnings Growth: 14%
Debt/equity ratio: 0.14

When Thermo Fisher announced a 35% decline in first quarter profits, analysts were disappointed -- but continued to back the scientific equipment maker, which is one of the most highly rated stocks right now. "Given the track record in new product flow, execution in cost management, diversification and expansion in end markets, and potential for further revenue/earnings upside from government stimulus programs and M&A, we feel Thermo remains well positioned over the intermediate to longer term," concluded JP Morgan analyst Tycho Peterson in a recent note.

Andy Knuth, manager of the Westport Select Cap Fund, says Thermo Fisher is a high quality company. "Of particular importance is that they reconfirmed $1.2 billion in free cash flow this year and have the authorization to execute more share buybacks," he says.

--M.K.

NEXT: DEEP VALUE: Baker Hughes

Last updated June 11 2009: 10:27 AM ET
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Criteria include PEG ratios (price/earnings ratio divided by earnings growth) below S&P 500's PEG rati of 2.09, long-term earnings growth equal to 7% or more, and a debt-to-equity ratio below 0.33. All data related to stock price as of June 1, 2009. Earnings growth based on Wall Street estimates for the next three to five years.
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