Why AOL, CEC Entertainment, and SolarCity Soared Today

The stock market gave up ground on some troubling earnings news, but nothing in the market's pullback prevented a few high-flying stocks from posting big gains. AOL jumped 11%, while CEC Entertainment rose 13%, and SolarCity gained 12%. Find out more about what made these stocks soar.

Jan 16, 2014 at 8:01PM

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 stock market showed signs of internal discord today, with the technology industry helping to lift the Nasdaq Composite even as the broader S&P 500 gave up ground. Yet, even with stocks giving back some ground from gains earlier in the week, AOL (NYSE:AOL), CEC Entertainment (NYSE:CEC), and SolarCity (NASDAQ:SCTY) all rose substantially in today's session.

AOL jumped more than 11% after the company said it would sell off a controlling interest in its Patch local-news business. Technology private-equity firm Hale Global bought a majority stake in Patch, and although AOL didn't reveal details of the transaction, investors welcomed the shift in AOL's strategy with respect to the venture. Although the company had managed to grow its revenue from Patch substantially, it was nevertheless losing money, and AOL shareholders appear happier to move forward in other directions. An analyst upgrade of AOL shares also contributed to the positive mood.


Source: Wikimedia Commons.

CEC Entertainment rose 13%. The company famous for owning the Chuck E. Cheese animatronic pizza chain agreed to a takeover bid from Apollo Global Management (NYSE:APO). In a sign that investors are hoping for a bidding war, CEC shares exceeded the $54 per-share offering price that Apollo set. But with CEC having sought ways to make the most of its slow-growth business, it's unclear whether any competing bids will emerge by the Jan. 29 deadline under the deal.

SolarCity gained 12% after analysts at Deutsche Bank started covering the solar stock, giving it a buy rating and setting a price target of $90 per share. The analyst pointed to SolarCity's success in getting capital markets to embrace its innovative asset-backed financing strategy, with possible plans to offer solar-linked debt directly to retail investors. As residential solar continues to get more popular, the opportunity for SolarCity to use its early-mover status to build up an impressive lead in the industry only gets bigger.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends SolarCity. The Motley Fool owns shares of SolarCity. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

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