Here’s Why Baron Health Care Fund Added Thermo Fisher Scientific (TMO) to Its Portfolio

Baron Funds, an investment management company, released its “Baron Health Care Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund rose 5.39% (Institutional Shares) in the quarter, compared to a 5.05% gain for the Russell 3000 Health Care Index (benchmark) and an 8.18% gain for the Russell 3000 Index (the Index). The Fund performed similarly to the Benchmark this quarter. Solid stock selection was primarily offset by negative effects from active sub-industry allocations and cash holdings during a rising market. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Baron Health Care Fund highlighted stocks such as Thermo Fisher Scientific Inc. (NYSE:TMO). Thermo Fisher Scientific Inc. (NYSE:TMO) offers life sciences solutions, analytical instruments, specialty diagnostics, laboratory products, and biopharma services. The one-month return of Thermo Fisher Scientific Inc. (NYSE:TMO) was 4.31%, and its shares gained 2.15% of their value over the last 52 weeks. On October 31, 2025, Thermo Fisher Scientific Inc. (NYSE:TMO) stock closed at $567.39 per share, with a market capitalization of $214.253 billion.

Baron Health Care Fund stated the following regarding Thermo Fisher Scientific Inc. (NYSE:TMO) in its third quarter 2025 investor letter:

“We added to the position in Thermo Fisher Scientific Inc. (NYSE:TMO), a life sciences tools company that offers instruments and consumables for research, tools for bioproduction, specialty diagnostics, and contract research and manufacturing services. During the quarter, management provided a reasonable framework for thinking about how the business could grow over the next few years. Management thinks end markets will gradually build from the lower growth environment that the company has been navigating, leading to a 2026 and 2027 scenario where the company will deliver 3% to 6% organic revenue growth. In that scenario, through strong cost management, management believes the company can deliver mid-to-high single-digit adjusted operating income growth, and with capital deployment, even better earnings growth. Beyond 2027, given the positive long-term drivers of the life sciences tools industry, management believes the company can deliver 7%-plus organic revenue growth. We think Thermo Fisher is a competitively advantaged business trading at a reasonable valuation with growth expected to accelerate after a challenging multi-year period.”

Thermo Fisher Scientific’s (TMO) Dividend: Steady Payouts in a Growing Market

Thermo Fisher Scientific Inc. (NYSE:TMO) is in 26th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 117 hedge fund portfolios held Thermo Fisher Scientific Inc. (NYSE:TMO) at the end of the second quarter, which was 101 in the previous quarter. Thermo Fisher Scientific Inc.’s (NYSE:TMO) revenue in the second quarter grew 3% to $10.85 billion. While we acknowledge the risk and potential of Thermo Fisher Scientific Inc. (NYSE:TMO) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Thermo Fisher Scientific Inc. (NYSE:TMO) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Thermo Fisher Scientific Inc. (NYSE:TMO) and shared the list of best stocks to invest in according to billionaire D.E. Shaw. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.