Why Michael Kors, Yum! Brands, and Headwaters Soared Today

Stocks regained a modest portion of its losses from yesterday. But several stocks saw very strong gains, with Michael Kors rising 17%, Yum! Brands picking up 9%, and Headwaters jumping 20%. Find out more about what made these stocks soar.

Feb 4, 2014 at 7:01PM

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 gave bullish investors some relief today, as many market analysts suggested that value-hungry investors decided to take advantage of the 325-point drop in the Dow yesterday to pick up stocks at a bargain price. Yet even though the rise of 0.5% to 0.75% for the Dow and S&P 500 didn't make up all of the market's lost ground, certain stocks did much better, with Michael Kors (NYSE:KORS), Yum! Brands (NYSE:YUM), and Headwaters (NYSE:HW) among the best performers of the day.

Michael Kors (KORS) spiked upward by 17% after the company announced strong results for the holiday quarter. The luxury retailer enjoyed comparable-store sales gains of 28%, beating its own guidance and leading to a 59% jump in total revenue. Margins were also strong, helping support a 77% rise in net income. As solid as 24% same-store sales growth in North America was, European comps of 73% wowed investors, and greater revenue from licensing shows that the luxury retailer appears to be running on all cylinders.

Yum! Brands (YUM) gained 9% after reporting earnings last night, with the fast-food giant seeing its net profit rising 4% in a big surprise to most investors. The key to the positive figures came from China, where total sales were up 3%. Things weren't perfect for Yum!, as the China division's same-store sales dropped by 4%. Yet in comparison to much worse results that the company has seen throughout the past several quarters, the quarter's figures led many investors to believe that a serious turnaround is just beginning for Yum! in China.

Headwaters soared by 20% as the building-materials specialist defied expectations for a quarterly loss in its most recent report, instead posting a modest profit and seeing quarterly revenue rise almost 11% from year-ago levels. In particular, Headwaters' building-product business saw sharp gains of 21% in sales, and that led the company to boost its projections for pre-tax earnings before interest and non-cash adjustments by about $5 million for fiscal 2014. As long as a strong U.S. economy keeps the industry moving in the right direction, Headwaters (HW) appears ready to keep taking advantage.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Michael Kors Holdings. 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.

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