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Why Halliburton, GNC Holdings, and Natus Medical Jumped Today

By Dan Caplinger – Oct 19, 2016 at 11:07AM

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These stocks helped lead the market higher. Find out why.

The stock market made further gains on Wednesday, adding to yesterday's rise on continued momentum from key parts of the economy. Oil prices resumed their advance, climbing back above the $51 per-barrel level, and making a case that the $50 mark might be a floor for crude, at least in the near term. Earnings season also continued to go well, with several big-name companies reporting solid results that reassured investors that the end of the current bull market isn't necessarily imminent.

Even though major market benchmarks had gains of less than half a percent, several individual stocks posted much more impressive gains. Among the best performers were Halliburton (HAL -4.63%), GNC Holdings (GNC), and Natus Medical (NTUS).

Image source: Getty Images.

Halliburton feels more energetic

Halliburton gained 4% after the oilfield services specialist released its third-quarter financial results. Halliburton managed to post a profit of $0.01 per share, which was far better than the $0.06 per-share loss that most investors were expecting to see. Cost containment measures have paid off for the energy services company, and rising rig counts could point to better times ahead.

Halliburton also said that it believes that activity levels among its customer base are highly likely to rise by a meaningful amount if crude prices remain above $50 per barrel, and that was good news for those who've been skeptical that such a small recovery from triple-digit prices several years ago would actually have a sizable impact.

GNC could be a tasty target

GNC Holdings rose 11% in the wake of a report from The Wall Street Journal saying that the nutritional supplement company has met with a number of potential Chinese buyers seeking to complete a buyout. The report put the estimated price of such a buyout at roughly $4 billion, which compares quite favorably to GNC's current enterprise value of less than $2.9 billion.

If Chinese consumers start to pay as much attention to their health as their counterparts in other parts of the world, then there would be a huge opportunity for GNC, or a similar Chinese company, to cash in, especially given that China's population is the largest on Earth. Counting on M&A deals from Chinese buyers is risky, but shareholders are still optimistic about GNC's prospects going forward.

Natus tells a great story

Finally, Natus Medical climbed 6%. The provider of healthcare screening and monitoring products released its third-quarter financial results Wednesday morning. Even though sales fell 4% from year-ago levels, Natus managed to keep its adjusted earnings steady on a year-over-year basis.

Positive adjustments to its full-year 2016 guidance made investors happy, but what Natus thinks could be truly game changing is its acquisition of Otometrics, which will close at the beginning of 2017. With the belief that Otometrics will add to Natus Medical's earnings next year and see an accelerating influence into 2018, investors are right to look forward to seeing how successful Natus can be going forward.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Natus Medical. The Motley Fool owns shares of Halliburton. 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.

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