WPI, SAI: S&P 500 Gainers

NEW YORK ( TheStreet) -- Watson Pharmaceuticals ( WPI) and SAIC ( SAI) were among the best-performing stocks in the S&P 500 on Wednesday.

The S&P 500 fell 2.63 points, or 0.19%, on Wednesday to 1,402.89.

Watson Pharmaceuticals shares increased 8.82% to $63.69 on heavy volume of nearly 11 million, more than five times the issue's trailing three-month daily average churn. The pharmaceutical company is reportedly in talks about buying Actavis, a Swiss generic drug manufacturer.

Watson shares trade at an estimated price-to-earnings ratio for next year of 10.4X; the average for pharmaceutical companies is 31.7X. For comparison, both Perrigo ( PRGO) and Hospira ( HSP) have higher forward P/Es of 18.9X and 13.5X, respectively.

Eighteen of the 25 analysts who cover Watson Pharmaceuticals rate it at buy; seven analysts give the stock a hold rating.

TheStreet Ratings gives Watson Pharmaceuticals a B+ grade with a buy rating and $76.90 price target. The stock has risen 5.55% year to date.

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