Stock Report: Hologic (HOLX)

Stock Report: Hologic (HOLX) - HE II HOLX 3 30 13

THE HEDGEYE EDGE

HOLX calls itself the “Women’s Health Company”.  Its principal product lines are Breast Health (predominately mammography) and Diagnostics.  HOLX is the US market leader in both mammography and Pap Tests. 

 

The company has recently had difficulties with its Breast Health product line in F1Q13 (4Q12), and HOLX shares lost ground on the earnings release.  We see this as buying opportunity as we view the current Breast Health weakness as temporary in nature, and not representative of its long-run potential.  

 

In addition to its Breast Health business, we remain bullish on its Diagnostics segment, which is the company’s largest segment.  In the near-term, we expect HOLX Diagnostics to benefit from both rising physician traffic and a recovery in US births.  Longer-term, we see the HOLX’s Diagnostic segment as one of the largest beneficiaries to the Affordable Care Act insurance expansion set to begin in 2014. 

TIMESPAN

INTERMEDIATE TERM (the next 3 months or more)

We’re expecting improving trends in F2Q13 (1Q13) in its Breast Health Segment, and we are already seeing signs of improvement in the macro indicators we follow.  We expect the stock to rebound as the concerns over the Breast Health segment are mitigated by improving trends.

 

LONG-TERM (the next 3 years or less)

HOLX may be the most levered name in the Healthcare space to the pending Insurance Expansion set to take place beginning 2014.  We see a long run-way in both the Diagnostic and Breast Health segment from the newly-insured members.  Within Breast Health, Hologic is at the beginning stages of a long term capital cycle led by their launch of 3D-Tomosynthesis technology and capacity constraints emerging at the customer level.

ONE-YEAR TRAILING CHART

Stock Report: Hologic (HOLX) - HE II HOLX chart 3 30 13


7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more