Why Valassis Communications, Ariad Pharmaceuticals, and DepoMed Are Today's 3 Best Stocks

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

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

The long-awaited day has finally arrived -- the Federal Reserve has begun tapering its monthly monetary easing program known as QE3.

According to Federal Reserve chairman Ben Bernanke in his final address before his term expires, the Fed will begin tapering its monthly bond-buying program by $10 billion per month. (To add context, the Fed has been pumping $85 billion into the economy on a monthly basis.) Bernanke did note, however, that the first increase in the federal funds rate may not even occur in 2016, according to the sentiment of three Fed governors.

Simply put, the expectation for months had been that the broad-based S&P 500 (SNPINDEX: ^GSPC  ) would tank on news of the start of QE3 tapering, but we're seeing the exact opposite effect today with the index exploding higher. This appears to be nothing more than confirmation from recent economic data that the U.S. economy should be able to stand on its own two feet, and that investors now have tangible clarity as to when and how the taper will commence.

By day's end the S&P 500 rocketed higher by 29.65 points (1.66%), to close at 1,810.65, another all-time closing high.

Leading the pack higher today is media solutions provider Valassis Communications (UNKNOWN: VCI.DL  ) , which advanced 22.3% after agreeing to be acquired by Harland Clarke for $1.3 billion, or $34.04 per share in cash. Valassis, which is the company behind Redplum advertising inserts, is getting a relatively small premium relative to its 2014 earnings; however, considering that Valassis' top-line growth is relatively stagnant, shareholders should be pleased with the deal. Both companies' board of directors approved the deal.

Struggling biopharmaceutical company Ariad Pharmaceuticals (NASDAQ: ARIA  ) surged 19.7% following word that the European Medicines Agency had added its blood cancer drug Iclusig to its meeting agenda for the month of December. Ariad shares already surged in late November on the expectation that Iclusig would remain on the market to treat leukemia patients, but would merely have more restrictions added to patients taking the drug. As a refresher, Iclusig has been linked with a higher incidence of blood clots in patients taking the drug according to Ariad's two-year follow-up study. This meeting with the EMA could be positive news as it may signal Iclusig's ability to remain on pharmacy shelves in the EU. As for me, I still advocate steering clear of this situation until the FDA doles out its decision on Iclusig remaining on the market.

Finally, biopharmaceutical company DepoMed (NASDAQ: DEPO  ) popped by 17.6% after announcing the purchase of migraine medication Cambia from Nautilus Neurosciences for $48.7 million. DepoMed could be on the line for an additional $5 million in payments depending on whether or not Cambia meets certain net annual sales milestones; but the deal, overall, looks like a winner for a company looking to diversify its product pipeline and lock in drugs free of generic competition. Cambia sales grew by more than 30% last quarter, and are protected by patent for the next 10 years. In addition, it's the only non-steroidal anti-inflammatory drug approved to treat migraines, leaving it in a niche market position. As I stated earlier today, I'd much prefer to wait for DepoMed to be back in the black before chasing it higher, but this is nonetheless a smart strategic move for the company.

The not-so-secret strategy to market-topping gains according to our co-founder
Tired of not seeing your stocks among the days top performers? Perhaps you aren't thinking far enough outside the box! Motley Fool co-founder David Gardner, founder of the No. 1 growth stock newsletter in the world, has developed a unique strategy for uncovering truly wealth-changing stock picks. And he wants to share it, along with a few of his favorite growth stock superstars, WITH YOU! It's a special 100% FREE report called, "6 Picks for Ultimate Growth." So stop settling for index-hugging gains... and click HERE for instant access to a whole new game plan of stock picks to help power your portfolio.

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2770177, ~/Articles/ArticleHandler.aspx, 9/29/2016 8:23:58 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 10 hours ago Sponsored by:
DOW 18,339.24 110.94 0.61%
S&P 500 2,171.37 11.44 0.53%
NASD 5,318.55 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 5:27 PM
^GSPC $2171.37 Up +11.44 +0.53%
S&P 500 INDEX CAPS Rating: No stars
ARIA $14.14 Up +0.19 +1.36%
Ariad Pharmaceutic… CAPS Rating: **
DEPO $24.53 Up +0.13 +0.53%
DepoMed CAPS Rating: ****
VCI.DL $0.00 Down +0.00 +0.00%
Valassis Communica… CAPS Rating: **