Health Stocks in Motion

J&J rallies after a solid quarter.
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Updated from 3:08 p.m. EDT

Shares of

Beverly Enterprises

(BEV)

were among the best-performing health-related stocks Tuesday, rising 25.5% after the company said it was reviewing "preliminary expressions of interest" from an investment group that includes Appaloosa Management, Franklin Mutual Advisors, Formation Capital and Northbrook NBV.

Late Monday the investment group said it would be willing to pay $11.50 a share, which translates into a premium of 30% over the stock's average closing price for the past 20 trading days. The disclosure was made in a regulatory filing. As an alternative, the investment group said that it would be interested in buying all of Beverly's real estate assets and nursing facilities. If Beverly sold its real estate and nursing facility operations, the company would be left with the Aegis Therapies and Home Care operating segments.

In a statement late Monday night, Beverly said it is reviewing the details set forth in the 13-D filing and that it "will respond in due course." According to the filing, the investor group already owns 8.1% of the company. Shares traded up $2.39 to $11.77.

Kinetic Concepts

(KCI)

fell 2.9% after the medical equipment maker's fourth quarter fell below expectations. The company earned $34.2 million, or 47 cents a share, on sales of $273.7 million. Analysts polled by Thomson First Call were expecting earnings of 48 cents a share on sales of $277.1 million. Looking ahead, Kinetic said that first-quarter sales would be flat to slightly above fourth-quarter sales. Analysts are expecting sales of $286.2 million. For all of 2005, the company expects earnings of $2.10 to $2.20 a share on sales of $1.2 billion to $1.25 billion. Analysts are expecting earnings of $2.20 a share on sales of $1.25 billion. Shares traded down $1.98 to $67.27.

Shares of

Cubist Pharmaceuticals

(CBST)

rose 9.3% after the company posted a narrower fourth-quarter loss on sales that were ahead of expectations. The biopharmaceutical company posted a loss of $17.7 million, or 40 cents a share, on sales of $25.4 million. Analysts were expecting a loss of 44 cents a share on sales of $22.3 million. A year ago the company posted a loss of $31.5 million, or 83 cents a share, on sales of $3.4 million. The sales increase was due to a substantial increase in sales of Cubicin, the company's bactericidal antibiotic product. Shares traded up 93 cents to $10.93.

Johnson & Johnson

(JNJ) - Get Report

rose 3.6% after the giant health care products company posted fourth-quarter results that came in ahead of expectations. Excluding items, the company earned $2.01 billion, or 67 cents a share, on sales of $12.75 billion. Analysts were expecting earnings of 64 cents a share on sales of $12.03 billion. A year ago the company earned $1.7 billion, or 57 cents a share, on sales of $11.25 billion. Shares traded up $2.23 to $63.72.

Other health care movers included

Aastrom Biosciences

(ASTM)

, up 37 cents to $3.60;

Pfizer

(PFE) - Get Report

, up 33 cents to $24.59;

Merck

(MRK) - Get Report

, up $1.10 to $30.95;

StemCells

(STEM)

, down 7 cents to $4.92;

Amgen

(AMGN) - Get Report

, up 5 cents to $62.17;

Bristol-Myers Squibb

(BMY) - Get Report

, up 5 cents to $23.99; and

Schering-Plough

(SGP)

, up 28 cents to $20.31.