Why Plug Power, Dendreon, and Pacific Ethanol Are Today's 3 Best Stocks

The S&P 500 sinks as the Ukranian crisis thickens while Plug Power, Dendreon, and Pacific Ethanol soar.

Mar 3, 2014 at 5:15PM

The broad-based S&P 500 (SNPINDEX:^GSPC) finally had a day of positive economic data that it could rely on to push higher, but it wound up being thwarted by negative geopolitical issues that pressured markets from the opening bell.

Perhaps no story is of bigger concern than the escalating tensions between Russia and Ukraine, especially with Russia invading Ukraine's Crimean peninsula after assuring the rest of the world that it would not do so just days before. The potential for a conflict here is rising, and the prospect that it could negatively affect global growth is quite real.

On the other side of the coin, U.S. personal spending for January came in much higher than expected, with growth of 0.4% compared with expectations of just 0.1% growth. Personal spending is an important indicator, since consumer spending accounts for the lion's share of GDP growth.

Conversely, construction spending was weaker in January, growing by just 0.1% compared to 1.5% in December. This isn't too much of a surprise given that the weather in January practically shut down the East Coast on a number of occasions and thwarted a number of residential and enterprise construction projects.

By day's end, investors made it very clear that they're concerned with the crisis in the Ukraine and pushed the S&P 500 decisively lower by 13.72 points (-0.74%) to close at 1,845.73.

Leading the charge to the upside today is fuel cell systems developer Plug Power (NASDAQ:PLUG), which rose 24.6% after an analyst at Cowen & Co. bumped Plug's price target higher by 10% to $5.50. The price target upgrade comes on the heels of a big contract award, which we discovered last week came from Wal-Mart (NYSE:WMT) to provide fuel-cell systems for forklifts in select warehouses across the United States. Cowen also notes that this could open the door to more contracts in the U.S. and in possibly in Europe. The Wal-Mart contract is a big step forward for Plug Power in validating the viability of its fuel-cell technology, but it remains to be seen if the company can continuously deliver contract growth, or if this was an anomaly.

Shares of small-cap biopharmaceutical Dendreon (NASDAQ:DNDN) also rose strongly today, by 14.9%, after it reported better-than-expected fourth-quarter results before the opening bell. For the quarter, Dendreon delivered an 8% decline in Provenge revenue, its metastatic prostate cancer immunotherapy vaccine, to $74.8 million while its loss shrank by 44% to just $0.17 per share. By comparison, Wall Street had been expecting Dendreon to report a wider loss of $0.24 per share on $72.9 million in revenue. Investors seem pleased that Dendreon is making serious strides toward curbing its cash burn, but I'd caution that its goal of becoming cash-flow breakeven is still very much up in the air. Dendreon is going to need a strong launch in Europe if it has any hope of stemming its losses in 2014. I would suggest investors keep to the sidelines until such time as when Dendreon becomes cash flow breakeven.

Finally, ethanol producer Pacific Ethanol (NASDAQ:PEIX) continued its strong gains after reporting market-topping fourth-quarter results last week and tacked on 9.9% by day's end. Last week Pacific Ethanol announced that it will restart production at its Madera, Calif., plant on the heels of higher ethanol sales and the reversal of a hefty year-ago loss into a healthy $0.54 per share profit. By comparison, Wall Street had been forecasting a $0.01-per-share loss. Pacific Ethanol has certainly surprised investors to start the year, but keep in mind that the price it's receiving per gallon is actually lower than it was last year. Until we see consistent results, it's probably best to keep your expectations tempered.

Plug Power, Dendreon, and Pacific Ethanol may have rocketed higher today, but they'll likely have a tough time keeping 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

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.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

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. It's also featured on several dozen 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 ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers