Waverly Inc. stock has been on a tear for the past week -- trading heavily and rising almost 14 percent since Nov. 30 -- to the delight and puzzlement of investors and company insiders.
William M. Passano Jr., chairman of the Baltimore-based medical publisher, said yesterday that he doesn't know who is buying the company's shares, or why the price has risen so sharply.
Some people may be buying the stock on the belief that Waverly is a takeover target, he said, but he insisted that neither he nor his family, who control a majority of Waverly shares, has any intention of selling the company.
The company has announced two acquisitions recently, including yesterday's news that it has purchased a small Rockville-based publisher of medical test preparation books. But Passano said the deals were not important enough to have driven the price up by $2.75 a share since last Wednesday.
On Friday, Waverly's stock closed at $23.25, up $1.625 and a 52-week high, in unusually heavy trading on the Nasdaq stock market. That followed Thursday's gain of $1.375.
On Monday, the stock hit a trading high of $24.25 before dropping back to $23 at the close.
Yesterday, the stock closed unchanged, at $23, in moderate trading.
Although Waverly's corporate bylaws include "poison pill" provisions that make it extremely difficult for anyone to buy a controlling interest in the company without Passano family permission, takeover rumors have been heightened in recent weeks because of announcements of large stock purchases by big publishing companies.
In October, the Los Angeles-based Times Mirror Co., a medical publisher in its own right and owner of several newspapers, including The Sun and The Evening Sun, announced it had increased its holdings to more than 5 percent of Waverly's shares. And in November, Chicago-based printing company Newsweb Corp. said it had upped its stake to 7.68 percent of Waverly's outstanding shares.
But Times Mirror spokeswoman Martha Goldstein said yesterday that the company had not changed its stake in Waverly. And Mr. Passano said Newsweb had not purchased large blocks of shares in the last few weeks.
He said investors may be buying up Waverly stock because of a recent spate of good financial news.
Waverly "had a lousy year last year" but restructured and now is increasingly profitable, he said.
The company reported earning $303,000 on revenue of $32.6 million in the three months that ended Sept. 30, an improvement from the $3.8 million loss on sales of $27.6 million in the same quarter a year ago. And in October, Waverly said it would report a $2 million one-time gain in the quarter that will end Dec. 31 because of the sale of a German publishing operation.
In yesterday's announcement, Waverly said it had purchased Betz Publishing Co., which publishes some of the best-selling test preparation books for medical students.
Betz's six employees will operate the company as an independent division, and Betz will remain in its Rockville offices, Mr. Passano said. He declined to reveal the purchase price.
The Betz acquisition follows Waverly's Nov. 28 announcement that it had acquired publishing rights to a group of surgical textbooks and instructional videos published by Quality Medical Products of St. Louis.
Other investors said yesterday they too were happy with, but also baffled by, Waverly stock's recent price jumps.
Edward Shufro, president of New York-based Shufro, Rose & Ehrman, a money management firm holding nearly 3 percent of Waverly's shares, said he was "very pleased" with the price increases and liked Waverly because of its focus on the medical publishing business.
He said the buying may be fueled by takeover speculation. But he said that investors betting that someone will try to buy up all of Waverly's shares "are either very sophisticated or unbelievably stupid."