Why Central European Media, China Ming Yang Wind Power, and Dril-Quip Are Today's 3 Best Stocks

The S&P edges up for another record close as Central European Media, China Ming Yang Wind Power, and Dril-Quip all soar by double digits.

Feb 28, 2014 at 5:15PM

It appeared as if mixed economic data was going to do the trick and send the broad-based S&P 500 (SNPINDEX:^GSPC) to a huge gain; but, once again, the curse of the housing data struck, and sent the market only modestly higher after big early morning gains.

Longview

Investors certainly needed to put on their reverse psychology cap to understand the markets' intentions today, with the second estimate of GDP for the fourth quarter coming in at 2.4%, which is significantly lower than the initial estimate of 3.2%, and much lower than the final 4.1% growth reported in the sequential third quarter. Normally, weaker growth wouldn't push the S&P 500 up in the first place, but the other side of the coin is that weaker growth likely means a much slower taper of QE3 from the Federal Reserve, and thus, more free money being pumped into the economy via long-term Treasury and mortgage-backed security purchases.

On the other hand, some data was straightforward -- and good! The final reading of the Michigan Consumer Sentiment Index rose to 81.6 from a prior reading of 81.2, signaling that consumers are feeling more positive about their combined short-term and long-term financial outlook. Consumer sentiment is a key indicator to watch, because consumer spending is responsible for a big chunk of U.S. GDP.

Similarly, the Chicago Purchasing Managers Index came in with a reading of 59.8 in February, up slightly from a prior reading of 59.6. In addition to strong consumer spending, we need manufacturing sector expansion if we hope to drive the unemployment rate lower.

But, we also had housing data reported -- which has been the Achilles' heel of the S&P 500. It really doesn't matter whether the data is good or bad – if housing data is reported, the new trend is that the S&P struggles to hold its gains. Today, pending home sales for January were announced to have risen 0.1%, which was a nice reversal from the decline of 5.8% in the prior month. Still, with the prospect of lending rates rising over the long term, the housing sector is sitting in a precarious and worrisome position.

By day's end, the S&P 500 ended higher by 5.16 points (0.28%), to close at 1,859.45, a new record close, but off of the nearly 1,868 it touched intraday earlier in the trading session.

Leading all companies to the upside today was media business provider Central European Media (NASDAQ:CETV), which operates (unsurprisingly) in Central and Eastern Europe. Shares of CME, as it's commonly known, soared 74.9% after reaching a credit agreement with its largest shareholder, Time Warner (NYSE:TWX). The up to $545 million financing deal will allow CME to redeem its senior notes due in 2016 via a rights offering that will push the remaining balance of its loan out an extra year, and allow CME to become cash-flow positive by 2015. Central and Eastern Europe are considered emerging market economies that can grow at a significantly faster rate than the industrialized world, giving CME a chance to focus on its growth rather than on its precarious debt situation, while also providing a potentially profitable warrant scenario for Time Warner.

Shares of China Ming Yang Wind Power (NYSE:MY) soared 25% on the day as a continuation move from a report earlier this week from China Daily that China's government wants to increase wind power generating capacity this year. Furthermore, the report notes that offshore facilities will get top priority. As a producer of wind turbines, China Ming Yang could stand to benefit from an increase in orders, which could go a long way toward minimizing its quarterly losses. Total orders through China Ming Yang's first nine months of fiscal 2013 totaled 1 GW, and could easily eclipse that next year. One question remains: Can it reduce its expenses enough to at least get back to breakeven on an EPS basis?

Finally, deepwater offshore drilling equipment and servicing company Dril-Quip (NYSE:DRQ) rallied 12.2% after reporting better-than-expected fourth-quarter results. For the quarter, Dril-Quip delivered a 23% increase in total revenue, to $232.5 million, helped almost entirely by a $40.5 million increase in product revenue, as its adjusted EPS rose to $1.21 per share from $0.78 in the year-ago period. Dril-Quip also announced that its backlog had increased to approximately $1.2 billion, from $881 million, at the end of the prior fiscal year. By comparison, Wall Street had anticipated Dril-Quip would report an EPS profit of just $1.14. Looking ahead, the company forecast full-year EPS of $5-$5.20, which is below the $5.40 that the Street had been expecting, but was perhaps much better than many had anticipated with the weakness we've witnessed throughout the deepwater drilling sector. Despite today's positive news, at roughly 20 times this year's profit, and the deepwater drilling outlook still somewhat uncertain, I'd suggest keeping to the sidelines.

CME, China Ming Yang, and Dril-Quip may have soared today, but all three could struggle to keep up with this top stock 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.

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 has no position in any companies mentioned in this article. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers