I agree with you in most respects. I have visited the Hawthorne facility many times and Deepak and his team should be congratulated on their performance. I can remember when the stock was $2 per share, but 9/11 changed that over night. And, great execution with numerous acquisitions over time improved upon it. Still, I am trading it short because I believe it has dramatically overrun its current valuation. If it still goes up, I will lose on it, but I will gain on my other industrials (like Eaton). It's a hedge bet. I believe OSI has a lot more downside risk than upside potential while I believe my other industrial bets have greater upside and less downside. Not an industrial (a commodities play), but something you may want to look at is VALE right now. It is way down this year and pays a 6%+ dividend. It's a Brazilian miner and Brazil is very likely to put forth a stimulus package soon. And, if China does the same, there would be even more upside. Good luck.
Seems like you are changing your story a little. Now this is a "hedge" against your long plays?
And I don't quite get why you would place a generalized hedge in growth industries like security and health care in the first place. For me a good hedge would be in an industry like gaming, which is way over the top with saturation and plies its trade in discretionary income during a bleak economy.
I just went short OSIS. Reason...ASEI just ate their lunch in the people scanning business for the TSA. ASEI was awarded a $245M dollar contract for second generation machines yesterday that has a smaller foot print and they do not require a human operator to view images to detect threats.
ASEI mgt has not announced this award yet. It is posted on the fedbizopps.gov website.
Rapiscan Scanners have been banned in Europe. US airports are getting rid of their scanners from Major airports
Still, the potential risks have led some prominent scientists to argue that the TSA is unnecessarily endangering the public because it has an alternative — the millimeter-wave machine — which it also deems highly effective at finding explosives