Why XenoPort Inc. Shares Popped

XenoPort takes its proxy fight to the people, and investors reward its shares with a big gain.

Apr 22, 2014 at 2:07PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of XenoPort (NASDAQ:XNPT), a biopharmaceutical company focused on developing therapies to neurological disorders, gained as much as 18% following a press release that it mailed a proxy letter to shareholders urging them to vote for its three nominated board members in an upcoming board election.

So what: According to the press release from XenoPort, Clinton Relational Opportunity Master Fund, beneficial owner of 1.8% of XenoPort's common stock, has nominated three of its own members to be placed on XenoPort's board of directors. In response, XenoPort mailed letters to its stockholders urging them to vote in XenoPort's three suggested candidates. The highlights of the letter including the ongoing commercialization of restless-leg syndrome therapy Horizant, the development of XP23829, a fumaric acid ester candidate being studied as a therapy for relapse-remitting multiple sclerosis and psoriasis, and the notion that Clinton's board nominees may undermine the current board's goal of enhancing shareholder value.

Now what: You still might be scratching your head a bit and wondering why XenoPort is moving higher. The simple answer is that shareholders are going to be winners after this board election regardless of which side is the victor. Clinton is obviously intent on boosting the underlying value of its equity position, which would align nicely with shareholders. On the flipside, if XenoPort's nominees win it keeps intact the company's plan to expand Horizant's commercialization and focus on XP23829's development. Given that revenue should more than double this year and nearly double again in fiscal 2015, the company is obviously doing something right. As an investor I'd certainly like to see XenoPort's losses narrow a bit before I considered the company a viable investment opportunity, but at this point I'd have no trouble suggesting the company be added as watchlist candidate.

XenoPort shares may be popping today, but it'll likely have a hard time keeping pace with this top stock in 2014
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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.

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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. 

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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.

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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.

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