Will Boston Scientific continue to stay on its own?

About 18 months ago I talked about Boston Scientific Corp (BSX) and thought it was a good value stock at around $7. I'm wrong till now as it has not been acquired yet but does it really matter? Since then, BSX has jumped up 100% and is approaching its 5 year high around $13. As you can see below, I bought BSX call options in Apr 2012 at $0.38 for 20 contracts (equivalent to 2000 shares), which is now worth $2.23 per share. So the option profit is 455% as of now while the stock price has been "just" 100% more. This also shows why options are much better for investment if they are used correctly. I have sold 5 contracts to book in some money that is more than my original cost; in other words, I'm guaranteed to make some money in this trading. So the remaining 15 contracts will be my house free money which I intend to keep and let it ride. I think there is much more upside movement ahead for BSX.

BSX Jan 18 '14 $10 Call 04/27/2012

2.23

15

$0.38

$2,669.30*

455.75%

 

Here are a few bright spots for BSX, which makes me continue to be bullish on it. I also think there is still a good chance that BSX may be acquired by J&J or others.

• BSX recently reported solid 2nd quarter results and based on the encouraging numbers, it raised its 2013 revenues and EPS guidance. BSX has solidly turned around.
• BSX got a new FDA approval for its IntellaTip MiFi XP catheter
• BSX has expanded its electrophysiology (EP) offerings with FDA approval of its IntellaTip MiFi(TM) XP catheter and 510(k) clearance of its Zurpaz(TM) 8.5F steerable sheath, which has become a first-line treatment approach for patients with certain kinds of irregular heartbeats.
• To further stengthen its EP business, BSX has announced its plan to acquire Bard EP, the EP business of C.R. Bard, for $275 million. The acquisition is expected to close in the second half of 2013.
• BSX has also expanded its business footprint into emerging markets, especially China and India. It will invest approximately $150 million in China over the next 5 years to build a local manufacturing operation. This will further enhance its profit margin.

The good news and solid performance have triggered some major upgrade by equity research firm such as Zacks. They are too slow and late to spot this gem but it is better than not anyway. I'm glad people start to recognize the potential of BSX, which will likely further push it up and even draw more attention from the potential acquires.