Billionaire Carl Icahn Trims Stake in Hologic Inc. (HOLX) but Still Likes the Company

Hologic has undergone a massive overhaul since Carl Icahn acquired an activist stake in the company back in November 2013. The company had been performing extremely poorly when Carl Icahn initiated his position in Hologic. The healthcare-focused company had experienced two years of accounting losses, failed to generate any significant gains for shareholders and involved in weak and destructive acquisitions. For instance, Hologic acquired the molecular diagnostics company Gen-Probe in 2012 for $3.7 billion, which resulted in a $1.1 billion write-down within a year. In 2014, Carl Icahn managed to appoint two members on the Board of the company and also pushed out most of the company’s management, with several key management positions at the company being replaced last year. Eventually, the management overhauls were very effective, as the company managed to deliver a positive net income for only the second time since 2007. It seems that the management overhauls at Hologic are completed and the company continues to deliver strong financial performance. 

2/2 Happy we were instrumental in bringing Steve in, and think he’s done a great job.

— Carl Icahn (@Carl_C_Icahn) August 4, 2015

Just a few days ago, Hologic has announced the financial results for the third quarter of the fiscal year 2015 that ended June 27, which have not disappointed the investors. The company posted revenue of $693.9 million, up by 9.7% year-over-year on a reported basis. By the same token, the company’s GAAP earnings per share (EPS) advanced by an annual 150% to $0.10. Indeed, the third quarter financial results of Hologic reflect the positive changes that have taken place at the company over the last years. Steve MacMillan, the Chairman, President and Chief Executive Officer at Hologic, suggested that these financial results demonstrate the significant progress achieved by Hologic in building a company that can grow on both the top and bottom lines. Another hedge fund that has been bullish on Hologic Inc. (NASDAQ:HOLX) since 2013 is Raplh V. Whitworth’s Relational Investors, holding an ownership stake of 12.97 million shares.

Disclosure: None