What’s Moving Thursday’s Outperformers & How to Play it

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 flat trading day, a stock that outperforms with large gains is not hard to notice. Companies that see the greatest movement, on these days, are often driven by factors that could impact long-term trends. Therefore I am looking at stocks that moved to the highest degree on Thursday; stocks that might continue to trade higher. 

<table> <tbody> <tr> <td> <p>Company</p> </td> <td> <p>Ticker</p> </td> <td> <p>Performance*</p> </td> </tr> <tr> <td> <p><strong>JA Solar Holdings</strong></p> </td> <td> <p><strong><span class="ticker" data-id="209842">(NASDAQ: <a href="http://caps.fool.com/Ticker/JASO.aspx">JASO</a>)</span></strong></p> </td> <td> <p>17.52%</p> </td> </tr> <tr> <td> <p><strong>Vringo </strong></p> </td> <td> <p><strong><span class="ticker" data-id="271394">(NASDAQ: <a href="http://caps.fool.com/Ticker/VRNG.aspx">VRNG</a>)</span></strong></p> </td> <td> <p>15.75%</p> </td> </tr> <tr> <td> <p><strong>Sarepta Therapeutics</strong></p> </td> <td> <p><strong><span class="ticker" data-id="215154">(NASDAQ: <a href="http://caps.fool.com/Ticker/SRPT.aspx">SRPT</a>)</span></strong></p> </td> <td> <p>10.71%</p> </td> </tr> <tr> <td> <p><strong>Alcatel-Lucent</strong></p> </td> <td> <p><strong><span class="ticker" data-id="209682">(NYSE: <a href="http://caps.fool.com/Ticker/ALU.aspx">ALU</a>)</span></strong></p> </td> <td> <p>10.00%</p> </td> </tr> </tbody> </table>

*As of 1:30 PM ET

  • Solar stocks have now traded higher for two consecutive days, and JA Solar has been the best performer with a 27% gain during the last three sessions. The industry as a whole has benefited from Berkshire Hathaway’s acquisition of Antelope Valley projects from SunPower; showing that large corporations are willing to invest in solar. Therefore, investors might finally be seeing solar stocks as undervalued. JA Solar is currently trading with a price/sales of 0.16 and is based in the ever-so-important Chinese solar market. The stock has lost 95% of its value in the last five years. However, if this solar rally continues then rest assure that JA Solar will be along for the ride.
  • Vringo traded higher in response to a legal filing in which Google asked the court to postpone a ruling on the imposition of royalties. Vringo has been up-and-down as the news surrounding its lawsuit with Google changes by the day. However, at this point, the proceedings appear to be moving in favor of Vringo. The company is expected to receive royalties of 3.5% and a large payout for patent infringements. If in fact, Google is preparing to back down from its fight, then it bodes well for Vrigno, and its stock in the immediate future.
  • Sarepta Therapeutics rallied on Thursday without any news or speculation to drive its shares higher. The reason for its rally is most likely related to the new-year and the fact that it has become a favorite on Wall Street. It’s most likely that funds are rebalancing the stock into their holdings as the company prepares its Orpha drug for an FDA approval. This is one of my favorite stocks in biotechnology. It’s trading at just one times peak sales, and Orphan drug companies such as BioMarin and Alexion usually trade around 15x sales. Therefore, you can do the math and see just how much upside may exist for this stock.
  • Alcatel-Lucent was upgraded to Neutral by Credit Suisse and the stock rallied. Furthermore, the company announced that it will demo 12 new cloud service concepts; which appear promising. The stock has rallied 40% in the last month due to financing and a complete restructuring effort. If successful, this is a company with massive upside potential; as it currently trades at 0.17x sales compared to its competitors, which trade at 1.0-3.0x sales.

All of the companies above saw significant movement on Thursday. Looking ahead, these are all companies with catalysts and the value to trade considerably higher in 2013. Therefore, I’d consider the relevance of the news when making an investment decision, and then apply the fundamentals as part of your due diligence. Then, you might just find yourself a good play to return gains in an unstable economy.


BrianNichols is long ALU and SRPT. 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!

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