Friday, March 18, 2005

Hit #35

CTI Molecular (CTMI) today agreed to be acquired by Siemens for $1 billion in cash, valuing CTMI shares at $20.5/share. That is a 19.5% premium over my cost of $17.15/share.

I have only a few shares, since I had opened a position assuming that I will be able to add more on a pullback, a pullback that never came!

Siemens and GE have steadily acquired medical equipment companies over the last few years and this trend will continue. An additional bonus is that this sector is essential not impacted by the normal economic factors like interest rates, inflation etc.

CTI makes PET scanners for cancer detection, apart from providing related products and services. There are a few other smaller players left, but this sector rarely gets to a undervalued state and even when a window opens, it is usually for just a short while.


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