Hologic (HOLX) Offers Good Long Term Value

We will add Hologic Inc. to our Diagnostics and Tools Portfolio. Prior to its acquisition by Hologic we had GenProbe Inc. on our focus list. Hologic (HOLX $21.70), Market Cap of $5.84B, offers good long term value with a Price/Sales of 2.7, book value of $2.984B, P/B of  1.94 and an EPS estimate for year end Sep 2013 of $1.58. The stock was upgraded by William Blair on April 4. The Company is a broad based medical device, imaging and diagnostic Company with a focus in women’s health with mammography systems, laboratory solutions such as molecular diagnostic tests including HPV and Skeletal Health products for minimally invasive imaging. Fiscal Q2 earnings report will be on May 6. With the recent sale of Life Codes for $85M Hologic can focus better on its Gen-Probe diagnostic franchise. Based upon technicals only, near term downside is $20 and upside without an earnings upgrade is $24.

Disclosure: We are currently long HOLX.

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