Life Technologies Corp. (NASDAQ:LIFE) — This company manufactures and develops research products and instruments for the biotechnology and biopharmaceutical industries. Its products include technologies for polymerase chain reaction (PCR), sample preparation, cell culture, genomics research, and a host of sophisticated genomic products.
In 2011, it launched 240 new products, representing approximately 800 new stock keeping unit (SKUs) or barcodes. And since mid-2012, it has acquired several bioscience and genome-based development companies.
Credit Suisse estimates 2013 earnings will rise to $4.40 from $3.98 in 2012, and looks for $4.83 in 2014 and $5.25 in 2015. The company has regularly exceeded quarterly earnings estimates.
In January, LIFE announced that it had retained two investment banks to “assist in its annual strategic review,” which is code for, “We may be looking for a buyer.” Bloomberg reports that Credit Suisse mentions Thermo Fisher Scientific (NYSE:TMO) as a possible buyer at $65 to $70, but other names have surfaced as well, and it is possible that the final offer could be higher.
Technically, the stock exploded from a five-month consolidation in January, opening a breakaway gap and forming an inverse head-and-shoulders consolidation between $60 and $65. For the past three days, the stock has closed slightly above the neckline, which, if broken on high volume, could vault the stock to $72.
The major risk of owning LIFE is the failure of a takeover with management deciding to “go it alone.” But if that was to occur, buyers would still own a quality biotech stock that could pay off with huge long-term gains.