How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in Hologic (HOLX) ten years ago? It may not have been easy to hold on to HOLX for all that time, but if you did, how much would your investment be worth today?
Hologic's Business In-Depth
With that in mind, let's take a look at Hologic's main business drivers.
Headquartered in Bedford, MA, Hologic Inc. develops, manufactures, and supplies diagnostics, medical imaging systems and surgical products which cater to the healthcare needs of women.
Hologic operates through the following four segments:
Diagnostics (54.9% of total revenues in FY20): With the Gen-Probe acquisition, Hologic currently offers APTIMA family of assays that includes the APTIMA Combo 2 assay, which feature the APTIMA CT and APTIMA GC assays, the APTIMA HPV assay and the APTIMA Trichomonas assay. Other products include the ThinPrep system, primarily used in cytology applications. In the fourth quarter of fiscal 2019, this segment registered 6.2% growth year-over year.
Breast Health (17.8% of total revenues in FY20): Products include a broad portfolio of breast imaging and related products and accessories, including digital and film-based mammography systems, computer-aided detection (CAD), breast biopsy guidance systems, minimally invasive breast biopsy and tissue extraction devices and breast brachytherapy products. In the fourth quarter of fiscal 2019, this segment registered 6.3% growth year-over year.
GYN Surgical (9.9% of total revenues in FY20): Products include the NovaSure endometrial ablation system – used in the treatment of heavy menstrual bleeding and the MyoSure hysteroscopic tissue removal system – which allows incision less removal of fibroids and polyps within the uterus. In the fourth quarter of fiscal 2019, this segment registered 6.6% growth year over year.
Medical Aesthetics (1.3% of total revenues in FY20): Hologic completed the divestiture of its Cynosure Medical Aesthetics business on Dec 30, 2019.
Skeletal Health (1.5% of total revenues in FY20): This segment includes dual-energy X-ray bone densitometry systems, an ultrasound-based osteoporosis assessment product, and Fluoroscan mini-C arm imaging products.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Hologic, if you bought shares a decade ago, you're likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in April 2011 would be worth $3,492.48, or a gain of 249.25%, as of April 19, 2021, and this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 217.16% and gold's return of 13.99% over the same time frame.
Going forward, analysts are expecting more upside for HOLX.
Hologic’s rise in organic revenues in the fiscal 2021 first quarter amid the pandemic-led challenges is encouraging. Uptick in Diagnostic revenues, led by improvements in Molecular Diagnostics, buoys optimism. Robust demand for COVID-19-related products and ongoing recovery in other arms have enabled Hologic to provide a strong fiscal second-quarter outlook, instiling investors’ confidence. Recent buyouts and regulatory approvals bode well for Hologic. Expansion of both margins looks encouraging. Hologic’s earnings in the first quarter were better-than-expected and revenues in-line. Over the past six months, Hologic has outperformed its industry. Yet, possibility of a fall in Diagnostic revenues post the pandemic is worrying. Stiff competition and foreign exchange fluctuations persist. A weak solvency is also deterring.
The stock has jumped 8.28% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 2 higher, for fiscal 2021; the consensus estimate has moved up as well.
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