Why Vocus, Agios Pharmaceuticals, and Questcor Pharmaceuticals Are Today's 3 Best Stocks

The S&P 500 gets rocked for a second straight session while Vocus, Agios, and Quesctor all soar by double digits.

Apr 7, 2014 at 5:15PM

For a second consecutive trading session, the broad-based S&P 500 (SNPINDEX:^GSPC) got absolutely rocked.


Despite a lack of critical economic data today, investors took time to take profits as fears continue to build that the winding down of the Federal Reserve's economic stimulus known as QE3 could send growth significantly lower.

QE3 was instituted in order to dually help prop up weakened housing sector and to keep lending rates near historic lows to encourage businesses to borrow and expand, thus adding to the workforce and lowering unemployment. To that end QE3 has been very successful, with GDP growing by a healthy 4.1% in the third quarter and 2.6% in the fourth quarter. However, a scaling back of funds used to purchase long-term Treasuries could reduce bond prices which will increase yields. Higher yields are great for banks and insurers which invest in fixed-income assets, but they're terrible news for John and Jane Q. Public who have debt or are looking to purchase a home, as well as businesses that are looking to expand.

By day's end, investors digested these concerns and pushed the S&P 500 decisively lower by 20.05 points (-1.08%). The S&P 500's close of 1,845.04 is now 2.4% lower than when it set an all-time high just this past Wednesday.

In spite of market weakness cloud-based marketing and public relations software developer Vocus (NASDAQ:VOCS) soared 47.1% after agreeing to be acquired by GTCR Valor for $446.5 million in cash, or $18 per share. As noted by management, which voted unanimously for the buyout, GTCR's offer represents a significant premium to Vocus' historic average share price, so the deal should produce more winners than losers. The deal is expected to close sometime in the second quarter. With shares trading at just $0.08 below their buyout price it might be best to cash in your chips and put that money to work elsewhere.

Clinical-stage biopharmaceutical company Agios Pharmaceuticals (NASDAQ:AGIO) also had a magnificent day, gaining 27.8% after the company announced positive interim phase 1 results for its oral inhibitor of IDH2 mutations in patients with blood cancers. Its experimental drug, AG-221, was shown to be safe and tolerable in its initial patient cohorts, but that's not what got shareholders so excited. Agios also noted that of seven evaluable patients, six had an objective response with three complete clinical remissions. Although dose escalation is still ongoing and this is just an early stage study with a much larger patient pool needed, the simple fact that three blood cancer patients had a complete remission is astounding!

Shareholders should also consider this a win for Celgene, which is partnered with Agios on developing AG-221. Celgene hasn't been shy about spreading around its cash flow to find the next home run drug. Given today's early data, AG-221 should certainly be on that home run radar.


Source: Questcor Pharmaceuticals.

Finally, embattled pharmaceutical company Questcor Pharmaceuticals (NASDAQ:QCOR) rose 18.7% before the opening bell after announcing that it was being acquired by Mallinckrodt (NYSE:MNK) for approximately $5.6 billion. According to the press release, shareholders of the Acthar Gel manufacturer, which is approved for use in 19 different autoimmune and inflammatory disease indications, will receive $30 per share in cash and 0.897 shares of Mallinckrodt. In addition Mallickrodt will purchase all of Questctor's unexpired options. While pessimists in this highly short-sold stock got burnt badly today, they haven't given up hope – and with good reason. Neither company's shareholders have approved the deal yet, so it could still get voted down; and the gray cloud that is the ongoing FDA investigation into Questcor's marketing practices of Acthar Gel could still stymie the buyout. With considerable downside and limited arbitrage upside I would suggest you pass on Questcor.

Invest in the next wave of health care innovation
The Economist compares this disruptive invention to the steam engine and the printing press. Business Insider says it's "the next trillion-dollar industry." And the technology behind is poised to set off one of the most remarkable health-care revolutions in decades. The Motley Fool's exclusive research presentation dives into this technology's true potential, and it's ability to make life-changing medical solutions never thought possible. To learn how you can invest in this unbelievable new technology, click here now to see our free report.

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 recommends Celgene. 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