Long Position on ALOG @ $80.20 on 9/26/2012 (Rumor)

Analogic Corporation (ALOG) designs, manufactures, and sells medical imaging and security systems, and subsystems to original equipment manufacturers and end users primarily in the healthcare and airport security markets worldwide.

The company offers technology in the areas of computed tomography (CT), magnetic resonance imaging (MRI), digital mammography, ultrasound, and automatic explosives detection for airport security. Its Medical Technology business consists of two segments, Medical Imaging and Ultrasound.

The company’s Security Technology business designs and manufactures airport security systems and subsystems for both checked bag and checkpoint applications. These products include advanced explosives and weapons detection systems that generate three-dimensional images of objects contained within carry on or checked baggage. Analogic Corporation sells its products directly, as well as through direct sales force, independent sales representatives, and distributors.

Shares have formed a bullish "flag" after the firm raised its sales and earnings guidance. We are now hearing rumors of good news for this firm that should propel the shares higher out of this formation.

One of the rumors states that this stock will be named by the leading stock advisory service as one of its "top picks." This service is widely followed by mutual funds and institutional money managers. These investors have portfolios that mimic recommendations of this service. Their naming of the stock should lead to additional demand for the shares.

52-Week Trading Range:  $43.50 - $81.90

Last Trade:  $80.20

Stop Loss:   $76.20

Target Prices:  $88.20

Position closed on 10/22/2012 at price of $76.00 with a -5.24% loss in 26 days.

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