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Why Bridgepoint Education, Amedisys, and Blue Buffalo Pet Products Jumped Today

By Dan Caplinger – Mar 9, 2016 at 7:01PM

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These stocks led the market higher Wednesday. Find out why.

Image source: Blue Buffalo Pet Products.

The stock market generally took a pause on Wednesday, climbing modestly as investors marked the end of the bull market's seventh year. Rising oil prices once again helped pull the overall market higher, as crude oil finished above $38 per barrel, and the Dow finished back above the 17,000 level. Yet even though energy stocks were prevalent among the day's winners, many stocks in other industries managed to post even sharper gains. Among them were Bridgepoint Education (ZVO -30.34%), Amedisys (AMED 0.54%), and Blue Buffalo Pet Products (NASDAQ: BUFF).

Bridgepoint Education soared 34% after posting its fourth-quarter financial report Tuesday afternoon. The for-profit education company's results didn't look all that attractive on their face, with revenue sinking 11% for the quarter and net losses widening from year-ago figures. Yet even though adjusted operating income fell by half from 2014's fourth quarter, Bridgepoint's performance was actually far better than most investors had expected, especially given that many were bracing for operating losses even on an adjusted basis. Student enrollment continued to drop, falling by almost 6,700 students to 49,159 as of year-end 2015. Yet given that the entire for-profit sector has gotten beaten down so thoroughly, Bridgepoint investors apparently believe even modest positive surprises might be enough to turn the stock around.

Amedisys picked up 14% in the wake of its fourth-quarter earnings release late yesterday. Revenue climbed 12% to $337.3 million, and net income from continuing operations of $0.40 per share were $0.05 higher than investors had expected. CEO Paul Kusserow believes that the company's transition away from fee-for-service models toward gaining reimbursements for achieving patient outcomes will keep Amedisys ahead of some of its rivals. Moreover, Amedisys has continued to move forward aggressively with acquisitions, including the now-completed buyout of Florida's Infinity HomeCare and the more recently announced acquisition of personal-care provider Associated Home Care. Given the demographic tailwinds in the space, Amedisys has huge opportunities if it can continue to execute well going forward.

Finally, Blue Buffalo Pet Products gained 22%. Fourth-quarter results from the pet-food specialist included sales growth of 11% and a gain in adjusted net income of more than a third, and the company's guidance for 2016 revenue of $1.12 billion to $1.14 billion was consistent with investor expectations. Earnings guidance was even better, with the anticipated range of $0.72 to $0.74 per share on an adjusted basis topping the consensus forecast for $0.70 per share. With the pet-food producer looking to grow aggressively through internal investment to build additional manufacturing capacity, Blue Buffalo is taking advantage of healthy demand for its products.

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