NEW BULLISH Plays
Hologic Inc. - HOLX - close: 42.45 change: +0.72
Stop Loss: 39.70
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on August -- at $---.--
Listed on August 15, 2015
Time Frame: Exit prior to earnings report in November.
Average Daily Volume = 2.5 million
New Positions: Yes, see below
HOXL looks like a strong bullish momentum trading candidate. The S&P 500 index is only up +1.6% this year. The NASDAQ is up +6.6%. Yet HOLX is up +58% and has more than doubled from its 2014 lows. That's because the new leadership team has turned things around.
HOLX's CFO was recently interviewed in CNBC. He said that 18 months ago their business was in decline and new leadership has turned things around. They see a lot of growth opportunities both in the U.S. and internationally, especially for their Genius 3D mammography business.
If you're not familiar with HOLX they are in the healthcare sector. According to the company, "Hologic, Inc. is a leading developer, manufacturer and supplier of premium diagnostic products, medical imaging systems and surgical products. The Company's core business units focus on diagnostics, breast health, GYN surgical, and skeletal health. With a unified suite of technologies and a robust research and development program, Hologic is dedicated to The Science of Sure."
The company has beaten Wall Street's bottom line earnings estimates the last four quarters in a row.
Their most recent report was July 29th. HOLX reported its Q3 results of $0.43 per share. That's a +16% improvement from a year ago and four cents better than expected. Revenues were up +9.7% to $693.9 million, significantly above the $654 million estimate. GAAP gross margins soared +520 basis points to 54.6%.
Management raised their 2015 sales guidance from +7-7.4% to +9.1-9.5%. They also upgraded their earnings forecast growth from +13-13.7% to +17.1-17.8%. The stock soared almost +10% on this earnings report and bullish outlook.
Shares of HOLX have spent the last couple of weeks consolidating sideways in the $40.00-42.50 zone. This is bullish. Instead of correcting lower the stock has been digesting its gains in a sideways range. What makes this even more impressive is that HOLX has managed to maintain its gains even after legendary investor Carl Icahn said he had trimmed his position in HOLX.
Icahn's company sold about six million shares in the $40 range. After this sale Icahn still owns 9.99% of HOLX. It's not like he's bearish on the stock.
Technically HOLX looks poised to breakout past short-term resistance near $42.50. If that occurs we want to jump on board. Tonight we are suggesting a trigger to open bullish positions at $42.65.
Trigger @ $42.65
- Suggested Positions -
Buy HOLX stock @ $42.65
- (or for more adventurous traders, try this option) -
Buy the DEC $45 CALL (HOLX151218C45) current ask $1.50
option price is a current quote and not a suggested entry price.
Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.
Option Format: symbol-year-month-day-call-strike