Waters Corporation (WAT) Stock Looks Poised for New Highs

Page 1 of 2

Waters Corporation (NYSE:WAT) is far from a household name among most investors. But millions of investors who use S&P 500 index funds as part of their investing strategy indirectly own shares of the medical-technology company, and those who’ve bought shares directly have to be pleased with the performance that Waters stock has given them recently.

But given the nice returns that the company has provided, investors should ask whether Waters Corporation (NYSE:WAT) has the potential to keep growing. Let’s take a look at this little-known company to find out where its best prospects lie and how Waters is moving forward to try to capitalize on them.

What Waters does
Waters Corporation (NYSE:WAT) works to help scientists in numerous fields perform scientific analysis, with instruments that assist in the fields of liquid chromatography, mass spectrometry, and thermal analysis. Its products have application throughout the scientific professions, with companies in the pharmaceutical, life sciences, biochemical, and industrial sectors all having occasion to work with Waters to help them with develop and analyze their efforts in coming up with their own scientific innovations. With a history of that goes back 50 years, Waters’ first major client was The Dow Chemical Company (NYSE:DOW), which invested $400,000 in the young company and eventually took a substantial stake in Waters before it merged with biosciences company Millipore in 1980.

Waters Corporation (NYSE:WAT) now has operations that span the globe, getting roughly 30% of its revenue from the U.S., a similar amount from Europe, and the remainder mostly from Japan, China, and other Asian countries. Given the substantial increase in scientific and industrial activity in Asia in recent decades, the region remains an important driver of growth for Waters.

How Waters stands up to the competition
Since coming public in 1995, the stock has performed extremely well, rising at an average annual clip of more than 17%.

WAT Total Return Price Chart

Waters Total Return Price data by YCharts.

But Waters Corporation (NYSE:WAT) is far from the only company serving the scientific community. Thermo Fisher Scientific Inc. (NYSE:TMO) is the giant in the industry, with more than six times as many employees as Waters and seven times the revenue that Waters generates. Moreover, Thermo Fisher is only poised to get larger in the near future, as the company announced in April that it would acquire Life Technologies Corp. (NASDAQ:LIFE) for $13.6 billion. The deal will give Thermo Fisher exposure to the promising genomic testing industry — an area that has seen increasing growth as the costs of genetic analysis have come down and therefore begun to inspire more commercial viable applications — and shows the rewards available to investors in companies like Life Technologies given the trend toward consolidation in the industry. Agilent Technologies Inc. (NYSE:A) is another major player in medical- and chemical-lab equipment, with its own liquid chromatography, mass spectrometry, and genomics capability. Despite recent challenges, Agilent still represents a threat to Waters’ growth.

Why Waters has potential
In its most recent quarterly conference call, Waters Corporation (NYSE:WAT) executives indicated that they seemed content with the company’s overall strategy going forward, with continued solid growth and conservative capital allocation. With its Alliance system providing quality control for makers of generic drugs, demand for generic versions of an increasing number of off-patent drugs should help Waters keep growing in the pharmaceutical segment. Meanwhile, Waters has seen a ramp-up in sales for mass spectrometry systems, encouraging the company as it rolls out advanced systems to maintain its leadership role in the industry. In China, Waters noted demand not only for traditional life-science and industrial instruments but also for equipment to analyze food quality and safety.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!