U.S. HOT STOCKS: Herbalife, Acme Packet, MWI Veterinary

U.S. stocks were trading lower Monday, as the Dow Jones Industrial Average lost 116 points to 13893, the Standard & Poor's 500 Index fell 11 points to 1502, and the Nasdaq Composite shed 16 points to 3162. Among the companies with shares trading actively in Monday's session are Herbalife Ltd. (HLF), Acme Packet Inc. (APKT) and MWI Veterinary Supply Inc. (MWIV).

Herbalife Ltd. may be under investigation by the Federal Trade Commission, The New York Post reported Monday, citing documents. The nutritional-supplements maker has been embroiled in a public battle over its business model, defending itself against criticism from hedge fund manager William Ackman who argues it is a pyramid scheme.

Oracle Corp. (ORCL) agreed to buy Acme Packet Inc. for roughly $1.98 billion in cash, a deal the technology heavyweight said will accelerate the deployment of all-IP networks. Oracle will pay Acme's shareholders a per-share cash price of $29.25, a premium of 22% over Friday's close. Word of the deal lit a fire under networking names, namely fellow-broadband equipment maker Sonus Networks Inc. (SONS), BroadSoft Inc. (BSFT) and Procera Networks Inc. (PKT).

MWI Veterinary Supply Inc.'s sizeable fiscal first-quarter beat-and-raise, coupled with cash flow more than doubling, shows why the company's stock has been an investor favorite, surging nearly six-fold the past four years. A strong IPO Friday for Pfizer Inc.'s (PFE) animal-health business Zoetis Inc. (ZTS) further highlights the big money and investor optimism for the space.

 
 
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Brown & Brown Inc.'s (BRO) fourth-quarter earnings rose 17% as the insurance agency and brokerage firm continued to report top-line growth from commissions and fees. Results beat Wall Street expectations.

Clorox Co.'s (CLX) fiscal second-quarter earnings rose 17% as price increases pushed the consumer-products company's sales and margins higher. The company also raised its targets for the year.

Comfort Systems USA Inc.'s (FIX) 20% run over the last three months led BB&T to cut its rating to hold from buy, noting the valuation feels "full" and its sees tough times in the near future for the HVAC installation and maintenance provider. "While we continue to believe that nonresidential construction spending could recover more fully late this year or early next, we doubt that Comfort's [first half] outlook has improved since November," the firm said.

Humana Inc. (HUM) kept an upbeat outlook for 2014 at its investor day Monday, as 2014 will be an important year for health insurers as major changes under the health-care law click into place.

Mercury General Corp. (MCY) swung to a surprise fourth-quarter loss as the insurance company recorded lower revenue driven by investment losses, while its catastrophe losses nearly tripled due to Hurricane Sandy. Results missed Wall Street estimates.

Standard & Poor's downgraded its rating on NII Holdings Inc. (NIHD) one notch further into speculative territory, noting the wireless carrier's credit measures have deteriorated from factors including a delay in deploying 3G networks in its markets, primarily Brazil.

Royal Caribbean Cruises Ltd. (RCL) swung to a fourth-quarter loss as the cruise ship company recorded a massive impairment charge, although net yields--a key industry metric measuring revenue per available cruise day--beat expectations. For the year ahead, the company projected earnings well below Wall Street forecasts.

Moody's Investors Service placed its rating on Scientific Games Corp. (SGMS) on review for a possible downgrade, noting the company's plans to buy gaming-machine maker WMS Industries Inc. (WMS) for $1.5 billion will increase its leverage.

After jumping more than 15% since late-December, Tiffany & Co. (TIF) retreats Monday after Monness Crespi Hardt cuts the jeweler to neutral due to the rally and an "uncertain retail environment." The investment bank expects shares to be at current levels later this year.

Wet Seal Inc. (WTSLA) unveiled a series of cost-reduction efforts, including the elimination of the chief operating officer position, that will save the teen-clothing retailer about $5.5 million this year.

Yahoo Inc.'s (YHOO) biggest shareholder has sold 11 million shares, as it seeks to maintain a consistent percentage holding in the Internet firm amid Yahoo's aggressive stock buyback program.

Write to Mia Lamar at [e-mail]

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