Wednesday, July 04, 2007

Hit #170 (1-800 Contacts)

Contact lens seller, 1-800 Contacts (CTAC) is being acquired by Fenway Partners for $380 million. The $24.25/share cash offer represents a gain of 23.98% over my average cost of $19.55.

I am happy to see this taken out, even at this not-so-juicy premium. Having my eye fixed via Lasik recently, I just do not see contact lenses surviving much longer, unless of course some previously unknown side-effects of Lasik surface.

Among Lasik providers, LCA Vision (LCAV) has performed very well. The stock is somewhat expensive, though for long-term holders that should not matter much. TLC Vision (TLCV) is more speculative at this point, and the insider selling doesn't make things better.

Advanced Medical Optics (EYE), which recently acquired laser correction equipment maker Intralase (Hit $138), is a compelling buy now. The stock is depressed after a recent recall of a lens care product. A potential bid, which now seems unlikely, on Bausch & Lomb (BOL) from Advanced Medical, also may have scared away investors. I have opened a position recently, and would continue to buy around its current price.

An extremely speculative play, but with lots of supporting insider action, on eye-care solutions, including post-Lasik care, is Insite Vision (ISV). I have owned shares for a long time now, and have added more recently.

Previous hit - Ceridian(#169)


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