Shares in Carlsbad’s Alphatec Holdings (Nasdaq: ATEC) jumped more than 8 percent on Thursday on fairly strong volume, partly based on predictions of a turnaround for the company’s niche market: spine surgery.
Part of the price rise came as independent analyst Andy Batts, who owns no shares in the stock, suggested that it “could be a great investment idea for 2014” at a time when many companies that jumped strongly last year are coming down from their gains.
Alphatec, holding company of Alphatec Spine, peaked above $7 in 2010 and after a sharp dip was still above $3.50 for much of 2011. But it dropped below $2 over the past two years, as the entire industry faced pricing and reimbursement challenges.
In his Seeking Alpha investment site on Thursday, Batts said that even though some of those challenges remain, technological advancements and rising demand from the aging population were causing “a tremendous turnaround” for the industry as a whole, and said Alphatec could be poised to become a market leader.
Boston’s Summer Street Research Partners last month also predicted a turnaround for Alphatec, forecasting it would perform better than Wall Street expectations and setting a target stock price of $5.
After closing Wednesday at $2.25, the stock rose to nearly $2.53 by noon on Thursday, before dipping back to close at $2.44. It maintained the gain on Friday.
ZacksEquityResearch on Friday said it was maintaining its “hold” rating on the company and suggested that there are better plays in the medical sector, including Align Technology (Nasdaq: ALGN), Becton, Dickinson and Co. (NYSE: BDX) and Cardinal Health (NYSE: CAH).
But Zacks added that “yesterday’s price action is encouraging though, so make sure to keep a close watch on (Alphatec) in the near future.”