Why XOMA, Zillow, and Novavax Are Today's 3 Best Stocks

Strong earnings reports help push the S&P 500 higher for the ninth time in 11 sessions, as XOMA, Zillow, and Novavax lead all stocks to the upside.

Apr 29, 2014 at 5:15PM

High hopes for earning season continued to fuel the S&P 500 (SNPINDEX:^GSPC) upward on Tuesday, with the broad-based index advancing for the ninth time in the past 11 sessions. Economic data, on the other hand, was good, but not great.


First up, The Conference Board noted a dip in consumer confidence from a reading of 83.9 in March to 82.3 for April. All things considered, the latest reading still signals a fairly high level of financial optimism for consumers in the short and long term, although some investors may have hoped for more.

In addition, the Case-Shiller 20-city index showed a 12.9% year-over-year increase in home prices for February. This was more or less in line with economists' expectations, but down from the 13.2% year-over-year increase witnessed in January. As with the consumer confidence figures, this was a month-over-month decline, but a nearly 13% increase in home prices is fantastic, and it speaks to tight inventory controls by homebuilders.

By day's end the S&P 500 had digested the mixed but generally positive economic data and climbed 8.9 points (0.48%) to close at 1,878.33.

Topping the charts and leading to the upside was small-cap biopharmaceutical company XOMA (NASDAQ:XOMA), which jumped 20.2% after receiving an upgrade to buy from hold by research firm MLV. The upgrade was based on XOMA's valuation, as well as the expectation of positive results from its P3 EYEGUARD-B trial involving gevokizumab for Behcet's uveitis. As always, I would suggest investors largely ignore these analyst moves, which are short-term price drivers and rarely alter our investing thesis. As I noted earlier today, the same firm downgraded XOMA just weeks ago after noting numerous pipeline disappointments. While I personally believe XOMA has a lot of potential with gevokizumab, I'd also suggest waiting for more concrete results before diving in.

Online and mobile-based real estate information marketplace Zillow (NASDAQ:ZG) surged 14.1% on the day, though not because home prices were up by double-digits in America's largest cities year over year. Rather, hedge fund Tiger Global reported in its 13G filing a 9.5% passive stake in Zillow.

Zillow Mobile
Source: Zillow.

This new and substantial position suggests to investors that Zillow might have unlocked value that Tiger Global may want to exploit. While certainly a positive for investors, Zillow is still only marginally profitable and trading for a whopping 153 times forward earnings as of this writing. In other words, it'd be a tough sell, at least for me, to argue that the company has additional upside following today's move.

Lastlt, and returning to the biopharmaceutical sector, Novavax (NASDAQ:NVAX) gained 14% after reporting positive top-line data from a midstage trial involving its respiratory syncytial virus vaccine. According to its press release, Novavax's RSV-F protein nanoparticle vaccine was demonstrated to be both safe and tolerable in trials, consistent with its previous phase 1 results, and delivered significant increase in RSV-F antibody levels across all dosages and formulations. As with XOMA, there's a lot of potential for Novavax's pipeline, but it's still very early in development. Until we get into later-stage trials and can focus more on the efficacy of its vaccines, investors might want to tone their optimism down a bit.

Are you ready to take advantage of this TRILLION dollar health care opportunity?
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 its 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 owns shares of, and recommends Zillow. 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.

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