Why Generac Holdings, Natus Medical, and Medidata Solutions Soared Today

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The Dow Jones Industrial Average (DJINDICES: ^DJI  ) regained all its lost ground from yesterday and then some, climbing 96 points, and adding to its gains for the week as investors cheered a mostly favorable earnings season as well as signs of strength in the global economy. But outside the Dow, Generac Holdings (NYSE: GNRC  ) , Natus Medical (NASDAQ: BABY  ) , and Medidata Solutions (NASDAQ: MDSO  ) all delivered double-digit percentage gains that helped lift the broader market higher. Let's take a closer look to find out what sent those stocks soaring today.

Generac Holdings climbed 13% after releasing a favorable earnings report this morning. The maker of residential and light-commercial generators saw impressive sales growth of almost 21% that led to near-doubling of its profit. Generac got a lot of attention during Hurricane Sandy last year, when long power outages led many homeowners to look at emergency-power alternatives rather than relying on grid-based utilities to deliver on their service commitments. Investors have remained bullish about its prospects ever since, despite a lack of major hurricane activity so far in 2013.

Natus Medical gained 27%, also after a strong earnings report that raised investors' expectations for the future. The company makes a variety of diagnostic testing and monitoring products aimed at newborns, including neurodiagnostics for hearing, epilepsy, and sleep disorders. Sales at Natus rose 5% during the quarter, with profit almost doubling from the year-ago quarter. Positive guidance for the fourth quarter was well in excess of what investors had expected, justifying the big share-price advance.

The third quarter was also kind to Medidata Solutions, with the stock advancing almost 20% after posting gains of 27% in revenue from the previous year's quarter. Profits for the company were much better than analyst projections, as Medidata benefited from the movement in the health-care industry toward more digital and cloud-based solutions to improve efficiency and ease the free flow of health information. Clearly, share-price momentum is working in Medidata's favor in the hot industry, and investors should take care before jumping in at current levels.

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