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Why OraSure Technologies, Baytex Energy, and Handy & Harman Jumped Today

By Dan Caplinger – Jun 27, 2017 at 4:30PM

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The market sank, but these stocks gained ground. Find out why.

Tuesday was a down day on Wall Street, and major benchmarks finished with losses of as much as 1.6% on the day. A combination of factors weighed on sentiment, including the failure of the Senate healthcare bill to move to a vote before the Independence Day recess, comments from European Central Bank President Mario Draghi that suggested that the level of monetary stimulus in Europe would likely fall, and similarly negative statements from Fed Chair Janet Yellen about the valuation of the U.S. stock market. Even though major indexes fell, some stocks bucked the gloomy mood, and OraSure Technologies (OSUR -2.06%), Baytex Energy (BTE 1.11%), and Handy & Harman (NASDAQ: HNH) were among the best performers on the day. Below, we'll look more closely at these stocks to tell you why they did so well.

OraSure gets together with the Gates Foundation

Shares of OraSure Technologies jumped 10% after the maker of diagnostic tests and specimen collection devices said that it had entered into an agreement with the Bill and Melinda Gates Foundation. The deal allows OraSure to make its OraQuick HIV self-test available to patients in 50 developing countries at an affordable price, with the Gates Foundation providing funding to bridge the gap between the cost of the test and what those patients can actually afford to pay. The agreement will last for four years and involves some countries in which OraSure has already been providing tests through Population Services International's Self-Testing in Africa project, including Malawi, Zambia, and Zimbabwe. OraSure CEO Douglas Michels said that the company expects that the agreement will "substantially accelerate the adoption of the OraQuick HIV Self-Test in many more developing countries," and that could bode well for a company that has increasingly relied on international sales for growth.

OraSure logo.

Image source: OraSure Technologies.

Baytex gains on operational success

Baytex Energy stock rose 6% in the wake of the company's release of its operational update for the second quarter. The Calgary-based energy producer said that it expects average production of 72,500 barrels of oil equivalent per day, which is 5% higher than it achieved during the first quarter of the year. In particular, growth rates of 7% from the company's Eagle Ford properties will drive more than half of Baytex's overall production, and even the more sluggish Canadian assets should produce slight growth of around 2% on a sequential basis. Baytex chose not to make adjustments to its full-year production guidance, but the company did point out that it has hedged nearly half of its net exposure to West Texas Intermediate crude prices and has kept its balance sheet healthy enough to satisfy its financial covenants with lenders. Some worry that the recent drop in oil will be painful for Baytex, but the company still seems optimistic that it can weather tough times and emerge stronger.

Handy & Harman makes a deal

Finally, shares of Handy & Harman climbed 8%. The diversified global industrial company announced yesterday that it had accepted a merger agreement with conglomerate Steel Partners Holdings (SPLP) to acquire the remainder of the Handy & Harman shares that Steel Partners doesn't already own. Steel Partners had already accumulated a 70% stake in Handy & Harman, and under the deal, Steel Partners would give H&H shareholders 1.484 Series A preferred equity units for every H&H share they own. That essentially puts a value of $37.10 per share on the deal, based on the liquidation preference of the Steel Partners units of $25 per unit. Yet the current market price of the preferred is less than $22 per unit, and that partly justifies why Handy & Harman's rise wasn't bigger.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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