Whoa! These 3 Stocks Look Good to Go!

We're back to our bubble-building ways, the Cyprus bailout question already fading from memory. The Fed said it's going to keep the pump open full throttle, buying back $85 billion worth of bonds every month, and maintaining a low interest rate environment. The Dow Jones Industrial Average responded by jumping 56 points and closing at yet another new record high.

The three stocks below however were far removed from the scene of international intrigue, rising on their own merits. Yet, resist the urge to high-five everyone in the cubicles next to you. Smart investors won't celebrate until they know why their stock surged, because without a fundamental basis for the bounce, these stocks could just as quickly make the return trip down.

Company

% Gain

Obagi Medical Products (UNKNOWN: OMPI.DL  )

28.2%

Williams-Sonoma (NYSE: WSM  )

10.3%

Yingli Green Energy (NYSE: YGE  )

8.6%

You look mah-velous!
OMG! Skin care products maker Obagi Medical Products soared 28% after Valeant Pharmaceuticals (NYSE: VRX  ) offered to buy it for $344 million, or $19.75 per share. I noted last October that a buyout was likely the biggest catalyst for the company, because questions about ingredients, such as hydroquinone contained in some of its products, had states questioning whether to allow Obagi to sell them within their borders.

At one point, the skin care specialist actually had to withdraw from the Texas market, though it was eventually allowed to return; but California is examining its business now and has subpoenaed company records to dig even further. And there's always the possibility looming that the FDA will change its regulation of hydroquinone, thus disrupting sales. 

Analysts had speculated previously that Valeant (or Medicis or Allergan or any number of other pharmaceuticals) might be interested in its dermatology and aesthetics products, but the Fool's health-care analyst David Williamson thinks the Valeant tie-up is a win-win situation for both parties. Valeant says the merger is expected to close in the first half of 2013 and, once completed, will be immediately accretive to Valeant's cash earnings per share.

Home on the range
You might think of Williams-Sonoma as a high-end kitchen gadgets store, but, as owner of Pottery Barn and West Elm, it's also a high-end home furnishings retailer, and its fourth quarter results show that the roots we've seen put down in the housing market are beginning to take hold.

W-S said revenues surged over 10%, to $1.4 billion, driven in large part by West Elm sales soaring nearly 20% from the year-ago period. And that was on top of a tough comp of 34% last year. Indeed, the only laggard was Williams-Sonoma itself, which saw revenues at its namesake division fall 1.6% (and which were down 1.7% in the fourth quarter of 2012).

Sales did benefit from an extra selling week, but the retailer is feeling so confident about its future now that it also raised its dividend by 41%, to $0.31 per share, and announced a new $750 buyback program. 

Bed Bath & Beyond is expected to report its fourth quarter earnings within the next few weeks, and a positive report there might just confirm for good that housing is indeed rounding that bend that analysts have been saying for so long we're nearing.

Mean, green machine
Like a brooding cloud hanging overhead, solar shop Yingli Green Energy felt the impact of  Suntech Power's bond default last week that brought it to the brink of bankruptcy. But it got a bounce yesterday after announcing it was joining forces with low-cost polysilicon producer GCL-Poly that will give Yingli access to supplies and materials at a discount, and enable it to meet its expansion needs for shipping panels to solar farms. 

Shares of Yingli are down 45% from their 52-week high, even though it expects shipments of PV modules to be significantly higher in the fourth quarter than what it previously guided to. The new 40% increase is certainly better than the revised mid-teen estimates, but that's still below its original outlook of a 50% rise in shipments given last year.

Even in China the solar industry is reeling from the supply glut, and Yingli has the largest market share there, so changes in the makeup of its peers will have an impact on its own results. While prices of polysi have risen 11% so far in 2013, it remains a depressed industry in desperate need of consolidation, though whether alliances like the one between Yingli and GCL will staunch the hemorrhaging remains to be seen.

Whoa, Nelly!

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