Trick-or-treaters across the nation loaded up with all sorts of goodies earlier this week. Were there any health-care stocks providing sweets for investors this week? Let's look at three of the humongous performers.
The name says it all
This week's winner of the prestigious Motley Fool Humongous Health-Care Stock of the Week is Prestige Brands Holdings (NYSE:PBH). Shares for the maker of over-the-counter health-care products and household cleaning supplies soared 20% during the week.
Prestige Brands quarterly results delighted investors. Revenue jumped 53.4% compared to the same period last year. Diluted earnings per share increased 46.2% year on year. The company raised its full-year earnings guidance to $1.37 to $1.42, from the $1.22-$1.32 range provided earlier.
How did Prestige pull off such impressive numbers? The biggest factors at work included strong growth in the company's over-the-counter product sales, and gains from the acquisition of 17 brands from GlaxoSmithKline (NYSE:GSK). The transaction with Glaxo was finalized in January 2012.
Shares for biotech Dendreon (NASDAQ: DNDN) jumped nearly 17% over the past week. The gains were made for the most part on Friday, after the company announced its quarterly results.
Revenue for the quarter increased 27%, compared to 2011. Dendreon reported a net loss of $1.04 per share, which was worse than the $1.00 per share loss during the same quarter last year. However, the company lost $0.33 per share adjusting for one-time charges.
Dendreon benefited to some extent from a decision by Aetna (NYSE:AET) to expand its coverage of Provenge, a drug targeting treatment of prostate cancer. The company's fortunes ride on how well Provenge gains traction, so positive steps by major insurers certainly help.
Home sweet home
Home health and hospice provider Gentiva Health Services (NASDAQ: GTIV) reported earnings results on Nov. 1, and shares shot up over 15% for the week.
The results don't sound that great on the surface. The company lost $0.02 per share, and sales dropped 6% compared to the same quarter in 2011. However, the loss for the quarter is deceiving. Excluding a one-time writedown, Gentiva's earnings would have been $0.32 per share. That easily beat the $0.28 per share expected by analysts.
While Gentiva provided treats for shareholders this week, the possibility exists that a bad trick could be on its way. Unless the powers-that-be in Washington change course, the provisions of the sequestration deal made between President Obama and Congress in 2011 will result in an automatic 2% cut of Medicare home health and hospice payments in 2013.
Smiling like a jack-o-lantern
If you owned shares in any of these three companies at the start of the week, you're probably smiling bigger than the jack-o-lanterns on display for Halloween. Gaining returns of 15% to 20% in a week, especially one shortened due to Hurricane Sandy, appeals to everyone.
Which of the three stocks is likely to keep smiles on the faces of investors? My pick is Prestige Brands. The company is executing well and has a strong product lineup. It also doesn't face the level of risk that Dendreon and Gentiva do. For this week, though, all three stocks left a sweet taste in shareholders' mouths.