3 Humongous Health-Care Stocks This Week

Let's start with a caveat. Humongous is a relative word. We often see health-care stocks that skyrocket 15% or higher in one week. That didn't happen this week.

But in a week where the Dow, S&P 500, and Nasdaq indexes all fell, even strong single-digit returns in one week can be considered relatively humongous. With that said, let's look at three relatively humongous winners in the world of health care this week.

Perkin' up
Scientific instruments and services provider Perkin Elmer (NYSE: PKI  )  saw its shares jump more than most health-care stocks this week. The stock surged 9.5%, after the company released its quarterly results.

Revenues grew 13% compared to the same quarter last year. The strongest growth came from the company's Human Health segment. Revenue for the segment was $257 million, up 24% from the same quarter in 2011.

GAAP earnings were flat year-on-year, although adjusted earnings per share increased from $0.43 in third quarter of 2011, to $0.45 in 2012. Probably the best news was that Perkin Elmer raised its guidance for the year for adjusted earnings per share, to $2.05 to $2.07, from $2.00 to $2.05.  

Rumor has it
Another strong mover this week was Amarin (Nasdaq: AMRN  ) . Shares for the biopharmaceutical company increased 8.4%.

The only official news from the company this week related to two patents that were issued for Vascepa, Amarin's cholesterol drug. The stock didn't rise due to official news, though.

The real reason Amarin shot up stemmed from rumors that AstraZeneca (NYSE: AZN  ) might buy the company. According to the U.K.'s Daily Mail, AstraZeneca's new CEO Pascal Soriot could be eyeing an acquisition to scoop up Vascepa.

Analysts seem to expect something will happen. The median price target of the nine analysts surveyed by Thomson/First Call stands at $25. That target reflects a doubling of the current price for the stock.

Bouncing back
Stem cell drug company Osiris Therapeutics (Nasdaq: OSIR  ) trailed Amarin only slightly. Its stock jumped 8.2% this week.

Like Amarin, Osiris didn't have any earth-shattering news that you might view as a catalyst. The company did announce a new COO early in the week, but that didn't seem to have any significant effect on the stock.

My guess is that we're seeing something along the lines of reversion-to-the-mean prior to the company's earnings announcement on Nov. 5. The stock climbed steadily from August to early October, but then fell sharply from that point through last week. Investors could be thinking that shares were reaching the point of being oversold.

Best of the best
All three of these companies appear to be worth further consideration by investors. My pick for the best of these humongous stocks of the week is Amarin. I like the prospects for Vascepa for one thing.

I also think that the rumors that AstraZeneca could buy the company are definitely in the realm of possibility. Even if the rumors don't pan out, it would not surprise me if some bigger pharma player acquires Amarin in the not-too-distant future. If a deal with AstraZeneca or another possible acquirer gains solid traction, look for Amarin to be a truly humongous winner.

The biotech space can make or break investors overnight, and while Amarin might not disappear into thin air,  the success of its new triglyceride lowering drug is key to the company's future success or failure. The company has huge potential, but don't invest a dollar before reading everything you need to know about Amarin. You can start now with top Fool.com analyst Max Macaluso's premium research report. Click here now to keep reading.

Keith Speights has no positions in the stocks mentioned above. The Motley Fool owns shares of AstraZeneca plc (ADR). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2080343, ~/Articles/ArticleHandler.aspx, 11/28/2014 9:43:43 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement