Why Kellogg, Intuitive Surgical, and King Digital Entertainment Jumped Today

The Dow failed at its attempt to set a new all-time record high, but these stocks still posted reasonable gains. Find out more about what made them gain more.

Apr 3, 2014 at 8:00PM

Thursday was a disappointing day for investors, as early flirtations with all-time record highs for the Dow and S&P 500 eventually gave way to modest losses for the two market benchmarks. Even though the U.S. economy continued to show signs of reasonable performance in the run-up to Friday's employment report for March, concerns about conditions in foreign markets have held back enthusiasm over the U.S. stock market's ability to keep climbing as the bull market enters its sixth year. Nevertheless, among the top gainers in today's session were Kellogg (NYSE:K), Intuitive Surgical (NASDAQ:ISRG), and King Digital Entertainment (NYSE:KING), even though Thursday had an unusually small number of stocks making significant gains.

One lesson that investors should take from today's 6% rise in Kellogg is that it's not always immediately obvious to ordinary investors what's driving up the price of a stock. Many market participants speculated that the huge move in the slow-growing cereal stocks came from a leak of a potentially market-moving story, especially with volume in the options market for Kellogg coming in orders of magnitude above normal levels. Without any more interesting news from Kellogg than a baseball-related promotion for its snack brands, Thursday's trade is one frustrating example of how investors often only learn and understand the reason for a stock's moves after the moves have already been made.

Intuitive Surgical's 4% gain was the robotic-surgical expert's third-straight day of gains following the FDA approval of its da Vinci Xi surgical system. Even a recall notice of certain reusable products called cannulae that are used in conjunction with the da Vinci wasn't enough to sour positive sentiment in the stock, with investors concluding that the FDA's approval of da Vinci Xi essentially takes away much of the shadow that had hung over Intuitive Surgical over the past year. Although safety concerns will likely require future action from Intuitive Surgical, its stock still trades below levels from early 2013, and that could provide plenty more room for gains.


Source: King Digital Entertainment.

Candy Crush Saga maker King Digital Entertaiment gained 3.5%, as the stock continued its rebound following an awful IPO performance last week. The stock still stands well below the IPO's $22.50 per share offering price, but King Digital does have a well-known product that has at least short-term profit-making potential. The key question King Digital must answer is whether it can build on its past success, but many investors see too many similarities with Zynga (NASDAQ:ZNGA)  and its own downward trajectory following its IPO to have faith that King Digital will avoid the same fate. Still, if the company beats the odds, those who got in below the IPO price could feel like they got good value in the long run.

Three stocks to own for the rest of your life
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Intuitive Surgical. The Motley Fool owns shares of Intuitive Surgical. 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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information