Why Alnylam Pharmaceuticals, Beam, and NII Holdings Are Today's 3 Best Stocks

The S&P sufferers its worst one-day performance in weeks as Alnylam Pharmaceuticals, Beam, and NII Holdings all gallop higher by at least 24%!

Jan 13, 2014 at 5:15PM

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.

Obviously, the broad-based S&P 500 (SNPINDEX:^GSPC) got up on the wrong side of the bed today, with the index suffering its worst loss of the year on weakening earnings expectations from other S&P components.

It was a light day on the economic data front, with the U.S. Treasury reporting a budget surplus of $53.2 billion in December, compared with forecasts that had called for a surplus of just $44 billion. This is good news, as it'd likely signal that budget deficit reductions are beginning to work, which could go a long way to reducing the exponential climb in U.S. debt that is viewed as unsustainable over the long term.

On the flipside, though, data from Thomson Reuters has shown that the vast majority of S&P 500 components that have pre-announced their earnings for the upcoming quarter have lowered their estimates -- not a good sign. It's been my contention as a tried-and-true skeptic of this rally that cost-cutting and share buybacks are masking a lack of top-line organic growth, and this is only more fuel for the fire.

By day's end, the S&P 500 had tumbled 23.17 points (-1.26%) to close at 1,819.20, its lowest close since Dec. 20. However, in spite of the significant down day, three companies scorched to the upside, leaving the S&P 500 in their dust.

Biopharmaceutical company Alnylam Pharmaceuticals (NASDAQ:ALNY) topped the charts with a gain of 40.9% after announcing a collaboration/investment of $700 million with Sanofi subsidiary Genzyme. The deal is a bit complex, but the gist is that Sanofi gains access to patisiran, Alnylam's familial amyloidotic polyneuropathy drug, ALN-TTRsc, two additional early-stage products in development, and the ability to license all of Alnylam's rare genetic disease drugs, globally, with the exception of North American and Western European markets. In addition, Sanofi will be taking a 12% stake in Alnylam and purchasing those shares at a 27% premium to Friday's close, or $80 per share. Wall Street and investors are clearly pleased with the potential for a future buyout, but I'd approach things more cautiously and wait for Alnylam's pipeline to do the talking.

Distilled-spirits maker Beam (NYSE:BEAM), the company behind Maker's Mark whiskey and Jim Beam bourbon, soared 24.6% after announcing an agreement to be purchased by Japan's Suntory for $83.50 per share, or $16 billion including debt. The deal will result in a company with spirits product sales in excess of $4.3 billion on an annual basis, according to the companies, and would move Suntory into the role of third-largest global spirits retailer. Suntory plans to fund the transaction with cash on hand as well as a loan from the Bank of Tokyo. At nearly 30 times next year's earnings, Beam is seeings its shareholders getting a fair deal.

Finally, NII Holdings (NASDAQ:NIHD), a mobile-service provider in Latin America, gained 24.4% after it and Spain's Telefonica (NYSE:TEF) announced a network agreement in Mexico and Brazil. Under the terms of the deal, NII Holdings, which supplies service to Nextel brand customers in Mexico and Brazil, will be allowed to use Telefonica's network to reach those customers and hopefully expand its subscriber base. The deal works symbiotically for Telefonica, allowing its Brazilian wireless brand, Vivo, access to a larger market in Brazil. While the deal could ultimately tie Telefonica and NII Holdings at the hip, which is great news for the struggling NII, it doesn't help NII's growing debt load or bring the company back to profitability. In other words, it's one step in the right direction, but the company still has a mile to walk before it'd be a viable investment opportunity.

Today's gains in these three stocks was impressive, but they might be peanuts compared with this top stock pick in 2014!
There's a huge difference between a good stock, and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool recommends Alnylam Pharmaceuticals and Beam. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information