June 28, 2007 / 10:15 PM / in 12 years

Hedge fund boosts stake in Advanced Medical

NEW YORK, June 28 (Reuters) - ValueAct Capital, a California-based hedge fund, disclosed on Thursday that it has sharply raised its stake in eye care products maker Advanced Medical Optics Inc. EYE.N, after the stock hit its lowest level in over a year this week.

In a series of U.S. Securities and Exchange filings this week, the fund revealed that since June 22 it has acquired about 2 million shares of the company, boosting its total stake in Advanced Medical to about 12.2 percent.

ValueAct, with some 7.3 million shares, is now Advanced Medical’s third largest shareholder, behind Fidelity Management & Research and MFS Investments.

The fund had first reported a 7.3 percent stake in Advanced Medical in May, but has been buying more shares since then.

In a filing in June the fund said it would be an active investor, though it has yet to publicly disclose any actions.

A spokesman for ValueAct could not be immediately reached.

But the buys suggest the fund views Advanced Medical as a “value play and not a value trap,” analysts at data tracker Insiderscore.com wrote in a research note.

ValueAct even bought more shares after Advanced Medical cut its outlook for the year on Tuesday, amid a recall of its MoisturePlus contact-lens solution.

The stock has fallen about 10.5 percent in the last three months, and hit a year-and-a half low of $32.47 on Tuesday.

The stock closed at $33.94 on the New York Stock Exchange on Thursday, but was trading up about 0.7 percent at $34.19 in light electronic trading after hours.

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