Why Mylan, Primo Water, and Seadrill Jumped Today

By Markets Fool.com

Monday gave investors some happy holiday news in the form of good-sized stock market gains, with major market benchmarks bouncing back from last week's losses to climb by roughly half a percent. Most of the attention in the market focused on the energy sector, where positive comments from Russian officials suggested that efforts to control supply in an effort to boost prices might finally start to succeed. More broadly, some interpreted Sunday night's presidential campaign debate as offering more clarity on the likely result of the 2016 election, and that also seemed to buoy shares. Some individual companies did far better than the broader market, and Mylan (NASDAQ: MYL), Primo Water (NASDAQ: PRMW), and Seadrill (NYSE: SDRL) were among the best performers in the market.

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Image source: Mylan.

Mylan settles its EpiPen woes

Mylan climbed 8% after the drugmaker reached a settlement with the U.S. Department of Justice late last week. The maker of the EpiPen allergy treatment had been under pressure from government investigations into its pricing strategy for the drug, with some Congressional officials believing that Mylan's decision to raise EpiPen prices dramatically had represented unfair or illegal gouging at the federal government's expense. Details of the settlement weren't available, but some consumer advocates fear that the deal will essentially let Mylan off the hook, giving the Justice Department no further reason to investigate allegations of questionable behavior on the drug-maker's part. Even if the settlement ends the EpiPen incident, Mylan and its industry peers can expect more attention on the regulatory front for the foreseeable future.

Primo Water makes a strategic buy

Primo Water soared 13% in the wake of its announcement that it would purchase industry peer Glacier Water Services. Primo said that the deal would pay $263 million to Glacier, with $50 million in cash and the remainder split between Primo stock and warrants, as well as the assumed debt and preferred stock of Glacier. The companies believe that the deal will more than double Primo's revenue, dramatically increase the scale of their penetration of water-dispenser machines in retail locations, and allow for cross-selling and synergy-producing opportunities. Investors agree that combining the two companies gives them both a better chance of beating out other potential competitors, especially as alternatives to remotely dispensed filtered water become increasingly common.

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Seadrill digs deep

Finally, Seadrill gained almost 10%. The rise in oil prices above the $50 per barrel mark certainly contributed to the offshore drilling specialist's success today, but it wasn't the only factor helping the company. Over the past couple of weeks, Seadrill shares have climbed in anticipation that board chairman John Fredriksen would make an investment of more than $1 billion to help the company restructure its outstanding debt, which currently exceeds $9 billion. In combination with higher oil prices, additional funds to restructure could help Seadrill mount an even bigger comeback in the long run.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Mylan and Seadrill. 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.