Why Hologic Inc. Shares Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Hologic (NASDAQ: HOLX  ) , a manufacturer of diagnostic, imaging, and surgical products for women, jumped as much as 11% after reporting better-than-expected second-quarter earnings results after the closing bell last night.

So what: For the quarter, Hologic delivered a 2% increase in revenue to $625 million, aided most by its breast health segment which saw revenue rise 8.5%. Adjusted income improved nearly 10% to $103.1 million, or $0.37 per share. By comparison, Wall Street had only been expecting Hologic to report a profit of $0.33 per share on revenue of $609.2 million. Furthermore, Hologic boosted its full-year revenue forecast to a fresh range of $2.46 billion-$2.49 billion, up from $2.43 billion-$2.48 billion, and raised its EPS range to $1.37-$1.40 from $1.34-$1.38, placing it more or less in-line with the Street's projections.

Now what: Focusing solely on women's health gives Hologic a comparative advantage that it's been using to deliver impressive organic growth for years. With strong pricing power comes fairly predictable margins – and investors love predictability in the health care sector. At 15 times forward earnings Hologic isn't too particularly expensive as long as it can continue to grow organically, even by low single-digits. For health care-savvy investors looking to take advantage of a relatively low volatility and profitable niche device and diagnostics company, I'd suggest digging a bit deeper into Hologic.

Hologic shares may have soared today, but it'll likely have a difficult time trying to keep pace with this top stock over the long haul
Give me five minutes and I'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks 1 stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2939558, ~/Articles/ArticleHandler.aspx, 8/29/2014 1:21:21 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement