Sprint Nextel Corporation (S), Life Technologies Corp. (LIFE): What Can a Top Hedge Fund’s Top 2 Holdings Do For You?

With this acquisition, Thermo Fisher Scientific Inc. (NYSE:TMO) will generate operating income synergies of $85 million in the first year. The companies will generate combined annual revenue of $16.3 billion, whereas Life Technologies Corp. (NASDAQ:LIFE) individually was estimated to generate total revenue of just $4 billion in 2014.

This acquisition is expected to get approval from concerned regulatory bodies, either at the end of 2013 or in early 2014, with a target share price of $76. Life Technologies Corp. (NASDAQ:LIFE) is currently trading at around $74, however, so there isn’t an entry point for the investors in that company’s stock before the expected acquisition.

Thermo Fisher’s total synergy within next three years

Bottom line

With the increased capital expenditure, Sprint will observe a rise in its market share. Further, acquisition of Sprint by SoftBank will provide handsets and services at an aggressive price. However, the market has already included these expectations and is trading near SoftBank’s offer price.

On the other hand, Life Technologies Corp. (NASDAQ:LIFE) – and its soon-to-be-acquirer, Thermo Fisher, will receive royalties from its deal with Ribo. This will create revenue generating opportunities for Thermo Fisher, but doesn’t provide an entry point for investors in Life Technologies Corp. (NASDAQ:LIFE).

Thermo is a “buy,” but Sprint and Life Technologies are a “hold.”

Madhu Dube has no position in any stocks mentioned. The Motley Fool recommends Thermo Fisher Scientific.

The article What Can a Top Hedge Fund’s Top 2 Holdings Do For You? originally appeared on Fool.com and is written by Madhu Dube.

Madhu is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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