April 16, 2021 14:30
In a statement issued during the day yesterday, the health products and technology company Thermo Fisher announced the purchase of PPD, a firm specializing in clinical trials, for a total of $17.4 billion while also assuming the debt of this company.
This transaction was completed after approval by the respective boards of directors after PPD accepted the purchase of its shares by Thermo Fisher for a total of $47.50 per share, representing a premium of 24% over the closing price of last Tuesday, April 13. PPD went public on February 6, 2020, with an initial price close to $30 per share.
In addition, Thermo Fisher expects that in the next 12 months this acquisition will generate a profit of $1.40 per share, generating, earning an expected income of $125 million thanks to the strong synergies between both companies.
As we can see in the daily chart, after its IPO, PPD’s stock experienced sharp declines dragged by the sharp falls in the stock markets at the beginning of the pandemic, reaching a minimum of $10.61 per share on October 18. March. From that moment, this stock experienced a clear upward trend that led it to recover its IPO levels, entering a strong lateral channel that began in August of last year.
In recent sessions, the price was exceeding its resistance levels successively relying on its average of 18 sessions, although after this news was known, the price suffered a strong upward gap, bringing the price of its shares to the levels established by the purchase of Thermo Fisher.
Source: Admiral Markets MetaTrader 5. PPD daily chart. Data range: February 21, 2020 to April 16, 2021. Prepared on April 16, 2021 at 11:45 am CEST. Keep in mind that past returns do not guarantee future returns.
During 2020, PPD revalued by 14.07%
Thermo Fisher Analysis
If we look at the daily chart, we can conclude that after marking a minimum of $250 last March 2020 with the initial falls of the pandemic, the price has experienced a strong rise that led it to mark highs at the level of $532.50 last November where it began a strong lateral movement with a bearish bias that has led it to bounce off its average of 200 sessions in the area coinciding with the lower band of this movement.
In recent sessions, we have been able to observe how the price has entered a slight overbought after breaking up to its 18 session average, which in turn caused a cross between short and medium-term averages, thus supporting the last upward rebound. Yesterday, after hearing this news, the price rose 4% to $494 per share.
It is expected to present results on April 29, so we must be very aware of these, since positive data could support its uptrend and take it to maximum levels if the price manages to overcome its downtrend line of short-term (in red), since as long as the price maintains its support level in the red band, the sentiment will continue to be positive.
Source: Admiral Markets MetaTrader 5. TMO daily chart. Data range: from February 18, 2019 to April 16, 2021. Prepared on April 16, 2021 at 12:20 CEST. Keep in mind that past returns do not guarantee future returns.
Evolution in the last 5 years:
- 2020: 43.37%
- 2019: 45.17%
- 2018: 17.86%
- 2017: 34.57%
- 2016: -0.53%
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