Hospira (HSP - option chain) shares are rising today after the company announced that the FDA has approved its generic cancer treatment docetaxel. The brand-name drug it will compete against, Sanofi-Aventis' (SNY) Taxotere, had sales of $1.2 billion in 2010. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on HSP.

HSP opened this morning at $53.66. So far today the stock has hit a low of $53.55 and a high of $56.00. As of 12:05, HSP is trading at $54.65 up $1.02 (1.9%). The chart for HSP looks bullish and S&P gives HSP a positive 4 STARS (out of 5) buy ranking.

Analyst Upgrades

• KeyBanc upgraded Las Vegas Sands (LVS) to hold from underweight based on Singapore performance and a potential revaluation of the yuan.
• ThinkEquity upgraded Seattle Genetics (SGEN) to buy from hold based on the positive SGN-35 HL data. The firm raised its price target to $16 from $12.
• Merriman upgraded Applied Signal (APSG) to buy from neutral with a $28 to $31 valuation range, citing greater confidence in earnings estimates and the company's recent contract wins.
• Siliconware Precision (SPIL) was upgraded to neutral from underperform at Macquarie.
• Pulte Group (PHM) was upgraded to neutral from sell at Goldman.
• Greenbrier (GBX) was upgraded to outperform from market perform at Morgan Keegan.

Hospira (HSP - option chain) stock is trading lower today after the company announced this morning it has agreed to buy Javelin Pharmaceuticals (JAV) for $2.20 per share in cash, or $145 million. HSP expects to begin a tender offer for all shares of JAV on April 21. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on HSP.

This morning, HSP opened at $56.15. So far today the stock has hit a high of $56.85 and a low of $54.19. As of 11:50, HSP is trading at $55.30, down $1.80 (-3.1%). The chart for HSP looks neutral and S&P gives HSP a neutral 3 STARS (out of 5) hold ranking.

Sanofi-Aventis (SNY - option chain) stock is trading lower today after the company announced this morning that it has settled patent infringement suits with Hospira (HSP) and Par Pharmaceutical Companies (PRX) related to certain generic versions of its cancer treatment Eloxatin. The settlements will stop HSP and PRX from selling generic versions of Eloxatin from late-June until August 2012. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on SNY.

This morning, SNY opened at $36.51. So far today the stock has hit a high of $36.69 and a low of $36.43. As of 12:10, SNY is trading at $36.69, down $0.51 (-1.4%). The chart for SNY looks neutral and S&P gives SNY a neutral 3 STARS (out of 5) hold ranking.

MOST NOTEWORTHY: Mako Surgical, ArcSight and ICU Medical were today's noteworthy initiations:

• Mako Surgical (NASDAQ: MAKO) was initiated with an Overweight rating at JP Morgan. The firm believes Mako has the most compelling system for navigated, robotic assisted orthopedic surgery to date.
  
• After ArcSight (NASDAQ: ARST) reported better-than-expected results for its Q3 and guidance for Q4 that Wachovia views as positive, the firm, which initiated shares with an Outperform rating, expects that regulatory compliance initiatives such as SOX will help protect the company from the slowdown, and help result in upward revisions to Wachovia's estimates in the future, as well as margin expansion.
  
• Soleil believes ICU Medical's (NASDAQ: ICUI) close distributor relationship with Hospira (NYSE: HSP) will drive its CLAVE/Custom IV franchises. The firm started shares with a Buy rating and $33 target.

OTHER INITIATIONS:

• Bear initiated Journal Comm (NYSE: JRN) with an Outperform rating and $10.25 target.
  
• Royal KPN (NYSE: KPN) was initiated at Societe Generale with a Sell rating.
  
• Broadpoint assumed Nuance Comm (NASDAQ: NUAN) with a Buy rating and $22 target.

The proper administration of medication is among the most critical of all medical procedures. There is a firm in Lake Forest, Illinois that helps care-givers maintain the best possible standards of safety and precision in the administration of over 130 injectable drugs, in over 600 dosages and formulations.

Hospira Inc. (NYSE:HSP) is a specialty pharmaceutical and medication delivery company. Its portfolio includes a broad line of generic acute-care and oncology injectables, anesthetics and diagnostic imaging agents. The firm also makes pre-filled syringes and intravenous delivery systems for quick and accurate administration by health-care providers. In acquiring Australia-based rival Mayne Pharma last month, Hospira doubled its international sales to nearly 30% of total sales.

Hospira surprised investors last week when it announced Q4 EPS of 43 cents and revenues of $706.5 million. Analysts had been expecting 38 cents and $673.7 million. Management also guided FY07 EPS to $2.11-$2.16 ($2.08 consensus) and FY07 revenues to $3.4-$3.48 billion ($3.44B consensus). Banc of America subsequently reiterated its "buy" rating on the issue and boosted its price target to $44. HSP shares popped through 200-day moving average resistance on the news and have since been consolidating the gain in a bullish "pennant" pattern. Equities frequently exit pennants moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.

Altogether, brokers now recommend the shares with three "strong buys," two "buys" and one "hold." Analysts see a 17% growth rate through the next year. The HSP P/E ratio (26.40), Price to Sales ratio (2.27), Price to Book ratio (4.48), Price to Cash Flow ratio (15.45), Price to Free Cash Flow ratio (35.69), EPS Growth rate (34.38%), Return on Assets (8.43%), Return on Investment (10.72%) and Return on Equity (17.68%) compare favorably with industry and sector averages.

Institutions hold about 72% of the outstanding shares. The stock is one of those used to calculate the S&P 500 Index. Over the past twelve months, it has traded between $31.15 and $45.25. A stop-loss of $33.85 looks good here.

Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.