Why Chelsea Therapeutics, Datalink, and Amarin Are Today's 3 Best Stocks

The S&P 500 climbs to its first record high of 2014, while Chelsea Therapeutics, Datalink, and Amarin all soar at least 15%!

Jan 15, 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.

Don't call it a comeback, but following a multi-week low in the broad-based S&P 500 (SNPINDEX:^GSPC) earlier this week, the iconic index roared higher for a second straight day on the heels of positive economic data to close at another all-time closing high.

Pushing the S&P 500 decisively higher today was positive data from the Mortgage Brokers Association, as well as the release of the December Producer Price Index report.

The weekly MBA report on loan originations showed a robust increase of 11.9%, which follows a gain in loan originations of 2.6% in the prior week. If consumers finally understand that lending rates are still historically low by all measures even though rates have moved higher than their May 2013 lows,  then the housing and mortgage service sector could still have life.

Similarly, the December PPI, a monthly measure that aggregates costs from nearly all goods-producing sectors and some 25,000 establishments, showed an increase of 0.4%, which compares to a contraction of 0.1% in November, and market expectations of a jump of 0.2% to 0.4%, depending on the source. While higher costs for businesses are rarely a good thing, this cost inflation is often a sign that economic times are strong, and could give businesses ample reason to boost organic growth by passing along price hikes to consumers.

By day's end, the S&P 500 had advanced by 9.50 points (0.52%) to close at 1,848.38, the S&P 500's first new record high of the year.

Leading all companies to the upside today is small-cap clinical-stage biopharmaceutical company Chelsea Therapeutics (NASDAQ:CHTP), which rocketed 91.7% higher after announcing a positive recommendation from the Food and Drug Administration's advisory panel with regard to Northera, a drug designed to reduce dizziness in patients with Parkinson's disease. The FDA's panel voted 16-1 in favor of recommending Northera for approval, which is a bit of a surprise given that the FDA had previously rejected Northera because of long-term efficacy concerns. The vote is even more baffling considering that the FDA advisory panel's briefing documents on Friday alluded to a complex decision at hand. While Chelsea shareholders should certainly be thrilled with today's decision, I would reserve my optimism for a later date as the FDA isn't required to listen to the advice of its panel, and Northera's long-term efficacy could still come into question.

Data center solutions provider Datalink (NASDAQ:DTLK) saw its shares soar 37.6% after it updated its fourth-quarter sales and EPS guidance after the bell last night. According to the company, it now anticipates reporting revenue of approximately $174 million for the quarter, up from its own previous guidance of $160 million to $170 million, and the current consensus estimate of $167 million. In addition, it upped its EPS guidance to a fresh range of $0.33-$0.37 from its prior guidance of $0.24-$0.30, and Wall Street's estimate of $0.25. Although no commentary was provided with the release, it's clear evidence that spending on big data centers and cloud-based software is only increasing, potentially positioning Datalink for years of strong growth.

Finally, small-cap biopharmaceutical company Amarin (NASDAQ:AMRN), which is focused on developing therapies to improve cardiovascular health, gained 15.9% in anticipation of a decision by the Division of Metabolism and Endocrinology Products (DMEP) with regard to its special protocol assessment for Vascepa. In October 2013, DMEP rescinded the SPA for the Anchor trial, but DMEP had set Jan. 15 as the date by which it would make its determination on a reinstatement or not. After the bell, however, Amarin released news that its reinstatement request had been indefinitely delayed. Given the likely need to run lengthy safety trials to appease the FDA with regard to expanded Vascepa usage, I would keep my nose clear of Amarin following today's move higher.

These gains are impressive, but they might be peanuts compared to our top stock for 2014!
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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.

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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.

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