Sector Snap: Health insurer stocks climb

Shares of Coventry Health Care Inc. led managed care stocks higher Monday as a Morgan Stanley analyst upgraded the sector, citing potential catalysts that could drive shares up.
Analyst Doug Simpson said in a research note he was raising his view of health insurance stocks to “Attractive” from “In-Line,” and he sees possibilities for several positive catalysts developing over the next six to 18 months.

Simpson noted that rising interest rates could boost investment income. He said the economy could see evidence of hiring by the middle of the year, “which would add incremental enrollment at low distribution cost.”

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The analyst also noted that the health care reform debate in Congress could be over by midyear, and any changes to the system should far off enough that run-rate business will not be affected yet. Investors have worried for months about how taxes, mandates and other parts of the health care debate may affect the health insurance industry. [Read the full article]

Shares of Perrigo Co. jumped to their highest point in a decade Monday after the company said it would buy Orion Laboratories for $48 million in cash, expanding its market in Australia and New Zealand.

Perrigo, based in Allegan, Mich., makes over-the-counter drugs. Orion, based in Australia, is a privately held supplier of nonprescription, store-brand drugs. Also, Orion makes and distributes pharmaceutical products to hospitals.

Perrigo shares jumped $1.60, or 3.2 percent, to $51.17 in afternoon trading. Earlier, the stock reached $51.33, its highest point in a decade.

Perrigo said the addition of Orion will boost annual sales by more than $30 million and add to earnings in the first year.

“The acquisition of Orion expands our global presence, complements our existing business and increases value for our shareholders,” said Chairman and CEO Joseph C. Papa, in a statement. [Read the full article]

Shares of AsiaInfo Holdings Inc. rose Monday after Goldman Sachs upgraded the Chinese telecommunications and information technology company, citing a strong growth outlook.

In a research note, Goldman said it expects AsiaInfo to benefit from healthy industry growth and an improving competitive environment. Furthermore, the company’s merger with Linkage Technologies International Holdings Ltd. will boost earnings and help it continue to gain market share in 2010 and 2011, Goldman said. The merger, announced in December, is expected to close this quarter.

The combined company will “dominate the China telecom IT service market,” Goldman said, raising its rating to “Buy” from “Neutral.”

AsiaInfo, which is based in Beijing, provides telecommunications software and information technology products and services. Its shares added $2.52, or 10.3 percent, to $26.94 in afternoon trading. The stock has ranged from $11.03 to $32.45 over the past year. [Read the full article]

Shares of Tetra Technologies jumped Monday after an analyst upgraded the oil and gas services company, saying it is one of the cheapest stocks among those in the industry.

J. Marshall Adkins of Raymond James said the company’s fourth-quarter earnings were in line with his estimates, but short of consensus.

He raised his rating on the company to “strong buy” from “outperform” and set a price target of $17.

Tetra shares rose $1.66, or 16.5 percent, to $11.74. The shares have traded between $1.94 and $12.87 over the past year.

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Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page. [Read the full article]

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