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 (^DJI -0.98%) 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 (GNRC 1.22%), Natus Medical (NTUS), and Medidata Solutions (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.
