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Inside Wall Street
WHAT'S PUMPING UP LUMEX?
Medical-equipment stocks have been taking it on the chin, a consequence of stiff price competition and concern over the health-reform bill. But lately, Lumex Inc. shares have regained some strength, rising to 12 from 9 in mid-January.
What's firing up the stock? Whispers are that a takeover move is afoot. Talk is that one big investor has finally decided to sell his stake to a group linked with a major company that has its eye on Lumex.
Investment pro Mike Connor of Fahnestock says that as a result of such speculation, he thinks management has taken steps to boost the stock's price. Namely, the company is planning to sell one of its two major divisions: the Lumex unit, which makes and distributes equipment for nursing homes, clinics, and hospitals. Products include bathroom-safety equipment and ambulatory aids. The unit alone, says Connor, is worth about 11 a share.
The other unit, Cybex, makes fitness and exercise equipment used in rehabilitation and conditioning. In a takeover, Connor estimates that the entire company could be priced at 20 a share in a takeover.GENE G. MARCIAL