THE HEDGEYE EDGE
We think Hologic is emerging from an extremely tough period which has left investors wary of further missteps. In out view, Hologic and it's new management are set to show solid growth over the next several years.
We have built two survey tools to track and forecast the two critical elements that will drive this acceleration.
The first survey tool measures 3-D Mammography placements every month. Recently we have detected acceleration in month over month placements. When Hologic finally receives a reimbursement code from Medicare, placements will accelerate further, perhaps even sooner. With our survey, we'll see it real time.
In addition to our mammography survey. We've been running a monthly survey of OB/GYNs asking them questions to help us forecast the rest of Hologic's businesses, some of which have been faced with significant headwinds. Based on our survey, we think those headwinds are fading.
INTERMEDIATE TERM (TREND) (the next 3 months or more)
Carl Icahn has recently declared his interest in Hologic. We are not quite sure what his plans are to improve the company. Speculation has been somewhat dampened by public comments made by management. At a minimum, Icahn's involvement provides some downside protection for the shares.
LONG-TERM (TAIL) (the next 3 years or less)
If the Affordable Care Act actually manages to reduce the number of uninsured, Hologic is one of the best positioned companies. When we measured the increase in products and services these typically younger uninsured individuals will consume when they get insurance, Hologic's products are at or near the top of the list. As the ACA matures over the coming years, we'd expect a tailwind for HOLX.