Why ICU Medical, Big 5 Sporting Goods, and Caesars Acquisition Jumped Today

By Markets Fool.com

Image source: ICU Medical.

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Thursday was a quiet day for the stock market, with mixed performance from major market benchmarks. The Dow and the Nasdaq Composite fell slightly from yesterday's close, while the S&P 500 added a single point. Investors appeared content to wait and see how the September employment report would look when it comes out Friday morning, and some concerns about the imminent threat of Hurricane Matthew to the Southeastern U.S. were likely on the minds of some market participants. Despite the flattish performance of the stock market generally, some stocks still managed to post substantial gains. Among them were ICU Medical (NASDAQ: ICUI), Big 5 Sporting Goods (NASDAQ: BGFV), and Caesars Acquisition (NASDAQ: CACQ).

ICU Medical makes a big buy

ICU Medical jumped 15% after the company purchased the infusion therapy business of pharmaceutical giant Pfizer (NYSE: PFE) for $1 billion. The deal involves ICU paying $600 million in cash along with $400 million in newly issued ICU shares, giving Pfizer a roughly 17% stake in ICU. ICU CEO Vivek Jain put the deal into a broader perspective, noting that "the combination of these two businesses is the natural evolution of a productive relationship that began more than 20 years ago when Hospira began integrating ICU Medical's needle-free technology into their infusion offering globally." With Pfizer having bought Hospira last year, the pharma giant has been looking at ways to refocus its combined business into its higher-priority areas. Selling Hospira Infusion Systems to ICU will result in the combined company being a leader in its industry, and it's a compelling pure-play opportunity for investors who are interested in the niche.

Big 5 Sporting Goods gets some investor optimism

Big 5 Sporting Goods gained 10% in the wake of a positive move from analysts at Deutsche Bank. The analysts looking at the sporting-goods store raised their rating on the stock from hold to buy, and they boosted their price target on the stock by nearly two-thirds to $16.50 per share. With the sporting goods retail industry in general having gone through tough times in the aftermath of major bankruptcies affecting some of Big 5's most important competitors, the major question for the survivors among sporting goods retailers is whether they could get through a highly promotional environment intact and eventually start seeing better conditions. That appears to be coming sooner rather than later, and if it works out the way analysts hope, Big 5 could end up being a big winner in sporting goods.

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Caesars Acquisition hopes for a brighter future

Finally, Caesars Acquisition climbed 7%. The company reported in an SEC filing today that the company had reached an agreement with various parties associated with different Caesars entities, including Caesars Entertainment (NASDAQ: CZR) and its operating company subsidiary Caesars Entertainment Operating Company. In July, Caesars Acquisition entered into an amended merger agreement calling for it to merge with Caesars Entertainment. The restructuring agreement essentially ensures that lienholders in the bankruptcy case involving Caesars Entertainment Operating Company will be able to pursue remedies pursuant to the bankruptcy plan, amending the merger agreement to add lienholders and their committee as third-party beneficiaries. The legalities of bankruptcy proceedings are convoluted, but in essence, investors appear to have concluded that the net result of the agreements is beneficial to Caesars Acquisition and its chances of moving forward in its intended way.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool is short Caesars Entertainment. Try any of our Foolish newsletter services free for 30 days. 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.