Advanced Medical Optics (NYSE: EYE) manufactures
and sells a variety of medical devices used to correct vision problems. Its cataract/implant products include artificial lenses used to replace human lenses, plus instruments and systems employed during the implantation surgery. Its laser systems are used in a variety of FDA-approved vision correction procedures. Its eye care product line features contact lens care solutions.
The company pleased investors earlier in the month, when it reported a Q1 loss of three cents per share and revenues of $304.6 million. Analysts had been looking for a loss of six cents and $287.4 million. Management also guided FY08 EPS to $1.25-$1.45 ($1.37 consensus) and FY08 revenues to $1.22-$1.24 billion ($1.22B consensus).
EYE shares
popped on the news and are now forming a bullish "pennant" consolidation pattern. Prices frequently exit pennants moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the shares with one "strong buy", one "buy" and nine "holds". Analysts see a 41% growth rate, through the next year. The EYE Price to Sales ratio (1.28), Sales Growth rate (25.02%) and EPS Growth rate (-0.13 to -0.03 yr/yr) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 95% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past 52 weeks, it has traded between $18.87 and $44.00. A stop-loss of $19.90 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.
Closing Bell: When you are just glad the closing bell came (AIG, DELL, GMGMQ, CSCO, POT)
Biotech ETFs: Best bets on health care reform
Cramer on BloggingStocks: The world's been waiting for the new GM 
