Tool Maker, Slow and Steady
I’ve always had a soft side for the life science tool makers. They’ve treated me well to some nice $$$. It’s currently a $25 billion industry growing at 7% annually and expected to grow to $35.7 billion by 2010 according to the December issue of the Genetic Engineering News. The major players in this industry are Sigma Aldrich (Ticker: SIAL), Techne (Ticker: TECH), Invitrogen (Ticker: IVGN) and Qiagen (Ticker: QGEN). I like Sigma Aldrich the most. They’re mostly a chemicals biz, but aggressively moving into some higher margin areas such as functional genomics. This company is very shareholder friendly. They constantly repurchase their own stock and pay a nice little dividend. So if I were to pick just one from this group; it would be Sigma Aldrich. If you want to add a little excitement with a little higher growth, I would look at Qiagen. They dominate the plasmid purification kit market and have a steady high teens plus growth rate. This sector is a safe way to play the biotech companies, but they are highly leveraged to R&D and government funding. I currently own Qiagen and Invitrogen, but looking to swap a bit into Sigma Aldrich.