Why BlackBerry Ltd., Textron Inc., and Red Hat Inc. 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.

With 2013 drawing to a close, the stock market appears to have taken on its traditional bullish tone as the holidays approach. The stock market posted modest but solid advances today, with the Dow up 42 points while the S&P 500 gained about half a percent, both setting new all-time record highs. Yet for BlackBerry (NASDAQ: BBRY  ) , Textron (NYSE: TXT  ) , and Red Hat (NYSE: RHT  ) , today's gains were much more significant, with each company having news that made investors more optimistic about their prospects.

BlackBerry soared 16% as the company released its quarterly report this morning. The mobile-device pioneer didn't make investors terribly happy with its financials, as the company posted 56% lower revenue and a net loss of $4.4 billion. But a long-term five-year agreement with Foxconn will have BlackBerry produce lower-cost devices that should appeal to the company's customer base in emerging markets. Moreover, interim CEO John Chen's emphasis toward the company's service offerings and its software products could bring about a useful change in direction that could help BlackBerry compete more effectively in the tech space. Given how far the stock has dropped, today's move is relatively insignificant in the long run, but it could signal an important inflection point if BlackBerry can continue to make progress.

Textron climbed 14% as reports swirled that the maker of Cessna aircraft could be close to sealing a deal to buy rival Beechcraft for $1.4 billion. With Beechcraft making planes ranging from its King Air turboprop planes to Hawker private jets, a combination would greatly expand Textron's Cessna division and its ability to offer business and personal customers tailored solutions to their transportation needs. The move also makes sense given Beechcraft's bankruptcy filing last year and its inability to follow through on a proposed sale to Chinese buyer Superior Aviation Beijing for $1.79 billion.

Red Hat also gained 14% after a positive earnings report last night, with several analysts raising their views on the stock following the report. Red Hat's sales grew 15% in dollar terms, with subscription revenue rising 17% and making up more than 85% of its overall sales. CEO Jim Whitehurst pointed to the success of its core products, including Enterprise Linux and JBoss Middleware, as driving growth for the company. Net income jumped by nearly half, and a big reversal in restoring growth in software billings helped put to rest fears of slowing business activity. Going forward, Red Hat's OpenStack program appears poised to generate even more sales from enterprise customers looking for flexible IT solutions.

You can pick winning stocks
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.


Read/Post Comments (1) | 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.

  • Report this Comment On December 23, 2013, at 1:21 PM, alboy5 wrote:

    Rht earnings look good for next earning report.

    You never know when it will popup for another 15% gain. I'm guessing in January.

Add your comment.

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: 2773509, ~/Articles/ArticleHandler.aspx, 8/27/2014 5:20:04 PM

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...


Advertisement