3 Humongous Health-Care Stocks This Week

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Biotech stocks typically rule the roost on our weekly list of the three humongous health-care stocks. Not this week, though. Here are the top health-care winners over the past few days -- sans biotech.

O Canada
Endo Health Solutions
(NASDAQ: ENDP  ) looked to the north for an acquisition. And its shares headed north as well, jumping 37% for the week.

The specialty health-care solutions provider announced plans to buy Canadian firm Paladin Labs for $1.6 billion. Paladin is a specialty pharmaceuticals company with products that treat several indications, including ADHD, pain, urology, and allergy. Endo's offer represented a 20% premium to the Paladin's closing price on Nov. 4 on the Toronto Stock Exchange.

Endo's deal pleased several analysts. Jason Gerberry with Leerink Swann gave the buyout a thumbs-up. So did Ken Cacciatore at Cowen, which upgraded Endo from underperform to market perform. Third-quarter earnings didn't hurt, either. Endo beat analysts' expectations on revenue and earnings.

Surprise performance
Institutional pharmacy services provider PharMerica (NYSE: PMC  ) has had quite an up-and-down year in 2013. It's now clearly on an upswing after announcing third quarter results. Shares soared 31% for the week.

PharMerica's third-quarter performance caught analysts by surprise. The company reported adjusted earnings of $0.49 per share, nearly 50% higher than the $0.33 per share expected by Wall Street. Revenue came in at $436.8 million. The average analysts' estimate for the top line was $401.7 million.

Adding icing to the cake, PharMerica raised its full-year earnings guidance for 2013 to a range between $1.71 and $1.76 per share. That's a nice bump from the previous guidance of $1.55 to $1.60 per share. 

Growing the family
Almost Family
(NASDAQ: AFAM  ) is growing its family. The home health services provider announced on Tuesday that it is buying SunCrest HealthCare for $75.5 million. Shares climbed 27% for the week.

The acquisition of SunCrest is the largest ever for Almost Family. It adds another $150 million annually to Almost Family's revenue and expands the company's reach to 240 branches across 14 states. The combined company should generate yearly revenue close to $500 million.

Along with the buyout news, Almost Family reported its third-quarter results. While the company continues to face challenges in the home health market, it grew revenue by nearly 6% year-over-year. Earnings from continuing operations declined from $0.45 per share in the third quarter of 2012 to $0.24 per share in the last quarter. However, $0.05 per share of that drop was due to transaction-related costs.

Honorable mention
Normally, a stock that gained over 20% in the week would have made our top three. That wasn't the case this week because of the exceptionally strong performance by Endo, PharMerica, and Almost Family. However, Keryx Biopharmaceuticals (NASDAQ: KERX  ) deserves an honorable mention. Keryx's shares jumped 22% this week.

The story for Keryx focused on great news from a mid-stage study of Zerenex in treating patients with non-dialysis dependent chronic kidney disease, or NDD-CKD, with elevated serum phosphorus and iron deficiency anemia. NDD-CKD represents a significantly larger market than the dialysis CKD indication for which Zerenex is currently seeking approval. I suspect that Keryx, while not quite making the top three list this week, could be the biggest winner out of all of these stocks over the long run.

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Related Tickers

9/23/2016 4:00 PM
AFAM $36.70 Down -0.41 -1.10%
Almost Family CAPS Rating: *****
ENDP $23.39 Up +3.13 +15.45%
Endo International CAPS Rating: ****
KERX $5.25 Up +0.08 +1.55%
Keryx Biopharmaceu… CAPS Rating: **
PMC $27.37 Down -0.80 -2.84%
PharMerica CAPS Rating: **