3 Healthcare Companies Poised For A Short-Term Pop

Includes: AGN, CDXS, USNA
by: Matt Schilling

Publicly traded, U.S.-based, healthcare and pharmaceutical companies revolve around three things: research breakthroughs, successful developments, and FDA approvals. These three companies clearly fit into those criteria, and are poised for a short term pop in the coming weeks.

Codexis (NASDAQ:CDXS) - The stock was is early trading on Wednesday after a very significant FDA approval. The Food & Drug Administration approved a process which was developed to assist in the manufacture of Sitaglipton. Sitaglipton is the active component in the diabetes drug Januvia which is manufactured and sold by Merck (NYSE:MRK).

Long term investors should be very pleased with the news. The process by which Sitaglipton is developed is also environmentally friendly. Basically they've developed a greener and cleaner way to implement such a process and in turn reduce the amount of waste that is created as a result. Currently trading near its 52-week low, CDXS shareholders will certainly benefit by this FDA approval. Once the process hits the mainstream, Codexis could see bottom line results as early as the September 2012 quarter.

Usana Health Sciences (NYSE:USNA) - Investors should note the stellar numbers USNA posted during its first quarter. The company's net earnings increased 21% due largely in part to gains from its presence in the Asian region. The outstanding performance in the region has allowed USNA to increase its FY 2012 guidance nearly 5% to $3.60/share from an earlier estimate of $3.45/share.

Positive guidance piques the interest of both long term and short term investors. The long term investors have the coming 2-3 years to look forward to, and from the looks of it continued growth both domestically and internationally. The short term investors could see quarterly EPS surpass the next estimates as the last four quarterly reports have beaten expectations by an average of 12%.

Watson Pharmaceuticals (WPI) - Through its recently announced acquisition of Actavis Group, WPI is now one of the largest global suppliers of generic drugs. The deal is expected to close in the fourth quarter of 2012. Watson said the two companies will have combined revenue of about $8 billion in 2012. Actavis, which is based in Switzerland, sells more than 1,000 products, and Watson said the deal will expand its business in Russia and Central and Eastern Europe.

Many investors will notice that Watson has developed and implemented several strategies over the last few quarters, including a focus to concentrate heavily on its global expansion. As a result of its plans to acquire Actavis, WPI has restructured its management team to enhance its position as one of the worldwide generic drug making leaders, recently surpassing Teva Pharmaceuticals (NYSE:TEVA) as the third largest.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.