Four Companies That Stuck Out on Tuesday; and that Might Trade Higher
Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
On a day when almost all stocks performed well, there were a few that shined above the rest. And in this article, I am looking at the best of the best, I am determining what moved the stocks, and lastly whether or not the catalyst could lead to additional gains.
- On Tuesday Nielsen announced the planned acquisition of Arbitron, which then pushed its shares higher. The words “controversial” and “dramatic” have been used to describe the deal, but in terms of valuation, Nielsen looks to have gotten a steal. Both companies are in the media ratings business, and are looking to grow in an ever evolving landscape. This acquisition shows that Nielson is prepared to be aggressive in its fight to grow in the various distribution channels for media. Furthermore, the company is also pairing with Twitter to track the reach of TV conversation, which should add further value. So although Arbitron will never make it atop a best daily performers list again, Nielson might very well in the near future, if it plays its cards correctly with its new acquisition and its new partner.
- Yoku rallied after being upgraded from Macquarie by two notches to Outperform. The firm noted a rise in ad rates and a continued rise in demand. Following the company’s 13.51% return on Tuesday, it has rallied nearly 25% over the last five trading days. The company continues to grow aggressively yet underperforms the market. Therefore I think it is worth your due diligence and is among the top tier of internet based companies in the market.
- After a challenging year, Tronox has rallied with gains of more than 22% in the last two days alone. Tronox is one of the largest producers of the ingredient titanium dioxide; and because of quashed demand the stock has been oversold and crushed over the last year. But now with a housing recovery in place, and a stock that is trading at a 37% discount to its book value, Barron’s argues that shares could double, maybe triple, as demand normalizes. Barron’s also calls the stock “ridiculously cheap,” and upon looking at its fundamentals, there is some truth to the outlook (if demand normalizes for the ingredient).
The three stocks above were the best performers in the market that have a market cap over $1 billion. However, there were also several strong small-cap performers on Tuesday, one being Vanda Pharmaceuticals (NASDAQ: VNDA). This is a company that announced data for its 84 patient Phase 3 sleep disorder medication that took its shares nearly 19% higher.
Vanda’s Phase 3 drug, tasimelteon, treats a very rare disease called non-24 disorder. The disorder affects the majority of blind people; those who do not perceive light and have highly disruptive sleeping patterns. Currently, there are no FDA approved treatments for non-24 disorder, therefore tasimelteon will most likely be the first. However, the disease is rare, affecting between 65,000-95,000 people, as a result it will not be a billion dollar product. But with Vanda being valued at just $108 million it does not need a billion dollar product to have significant upside potential. It’s definitely worthy of your due diligence.
The company’s on this list all had valid reasons for the gains that were created on Tuesday. However, it is yet to be seen as to whether or not the gains can continue. Either way these are stocks that could make intriguing investments, and should be monitored over the next few sessions.
BrianNichols has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!