Why Oramed Pharmaceuticals, Millennial Media, and Xoom Are Today's 3 Best Stocks

The S&P 500 dips for a third straight session, while Oramed Pharmaceuticals, Millennial Media, and Xoom shares rocketed higher.

Jan 27, 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.

It was another dreary day on Wall Street and for the S&P 500 (SNPINDEX:^GSPC), with mounting fears of slower growth beginning to get into the minds of investors who pushed the iconic index to its third straight loss.

At the heart of today's worries was new homes sales data that showed a 7% drop in December for a seasonally adjusted sales rate of 414,000, well below economists' expectations. This rapid fall in new home sales could put a damper on the entire housing sector and also points to just how fickle consumers and prospective homebuyers have been with regard to interest rates. Having been spoiled by record-low lending rates for years, consumers are simply sitting on their hands and waiting for even lower rates rather than jumping at the opportunity to buy a home at near record-low rates.

In addition, corporate earnings from the fourth quarter haven't exactly lit a fire under Wall Street. The initial indications would suggest that top-line growth is sluggish, and more companies than normal have actually come forward and lowered their quarterly or upcoming full-year expectations. I've contended (incorrectly thus far, may I add) for some time now that share buybacks and cost-cutting are masking sluggish corporate growth, and investors just might be waking up to that fact this earnings season.

By day's end the S&P 500 ended lower by 8.73 points (-0.49%), to close at 1,781.56, bringing its three-day loss total to 3.43%.

Bucking the trend, however, and leading the charge to the upside was small-cap clinical-stage biopharmaceutical company Oramed Pharmaceuticals (NASDAQ:ORMP)  which advanced 21.9% after saying it will announce Thursday the results from its phase 2a clinical trial for oral insulin treatment ORMD-0801 for type 2 diabetes. Shares of Oramed have been on fire since December, after the company announced positive results from a phase 1 pharmacokinetic study of ORMD-0801 in type 1 diabetes. Investors have since then been eager to see if these solid results translate to a wider population, since 90% of all diabetes cases are type 2. However, with shares having quadrupled in a month and the company wholly clinical-stage in nature, long-term investors may want to back off and let Oramed report its results later this week before making an investment decision one way or the other.

Mobile advertising platform operator Millennial Media (NYSE:MM) roared higher by 9.7% after announcing its preliminary revenue and EBITDA guidance for the fourth quarter. Millennial said in a press release it now anticipates reporting revenue of $106 million-$109 million with pro forma combined adjusted EBITDA of $5 million-$6 million. This compares favorably against Millennial Media's previous quarterly guidance of $95 million-$100 million in revenue and breakeven-$2 million in pro forma combined adjusted EBITDA. Millennial has worked hard at reducing costs while also expanding its business and looking for new avenues of growth. It's clear that a good chunk of mobile advertising growth is still up for grabs, but the question is whether those opportunities will prove consistent enough over the near term for investors to rally behind Millennial Media.

Finally, Xoom (NASDAQ:XOOM), a company that supports consumer-to-consumer online and mobile money transfers, jumped 9.1% after today announcing that it had launched a new series of ads touting its mobile transfer convenience to the Hispanic community. While many of us might take our ability to obtain cash for granted, large numbers of people around the world still have little to no access to a bank. Therefore, Xoom's ability to enable consumers to transfer money at the click of a button offers plenty of next-generation promise. At 72 times forward earnings Xoom might be a bit pricey, but with a growth rate well in excess of 20% it definitely deserves a premium over other financial service providers. It's a company I'd suggest adding to your watchlist.

These three companies certainly had a good day, but they may struggle to keep pace with this top stock in 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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