Why InterMune, Senomyx, and Gogo Are Today's 3 Best Stocks

M&A activity fuels the S&P 500 higher once again as InterMune, Senomyx, and Gogo lead individual companies higher.

May 19, 2014 at 5:15PM

Apparently you just can't keep a bull market down, as the broad-based S&P 500 (SNPINDEX:^GSPC) demonstrated this morning.


Although there was no key economic data today, and we likely won't even see anything of substance for traders to latch onto until Wednesday, merger and acquisition news again took the spotlight, even if investors were being hypercritical of the announced deals and rumors. Investors enjoy seeing large M&A deals because it signifies that businesses are willing to take on additional risks, and taking on risks implies that visibility is good and growth is expected over the interim. In other words, the M&A announcements and would-be deals we've witnessed recently involve much more than just the companies involved and could signify that the health of the overall market is viewed favorably by the many of the world's biggest companies.

By day's end, the S&P 500 had trudged steadily higher, erasing some very early morning losses, and finished in the plus column by 7.22 points (0.38%) to close at 1,885.08.

Leading all companies to the upside today was orphan fibrotic disease-focused biopharmaceutical company InterMune (NASDAQ:ITMN) which shot 13.4% higher after presenting positive data from its phase 3 ASCEND trial at the American Thoracic Society meeting in San Diego over the weekend. As noted in its press release, pirfendione, its idiopathic pulmonary fibrosis drug hopeful which is approved in numerous EU countries under the brand name Esbriet, met its primary endpoint of reducing the risk of a meaningful decline in forced vital capacity compared to the placebo group from baseline at week 52. Just 16.5% of patients experienced this FVC decline of 10% or more compared to 31.8% of patients in the placebo group. Furthermore, 22.7% of patients experienced no FVC decline, which was 132.5% higher than the placebo group. Data presented in the New England Journal of Medicine supported InterMune's findings as well. It's certainly looking as if pirfenidone has a better than 50-50 shot at approval in the U.S., however I'd caution investors that much of that optimism has been baked into its share price already, and to invest accordingly.


Shareholders in Senomyx (NASDAQ:SNMX) woke up to a sweet deal this morning with shares rising 10.2% on the day after it and its partner PepsiCo. (NYSE:PEP) announced a two-year extension of their current sweet flavoring agreement through August 2016. For PepsiCo. this is a no-brainer as it gives the company a possible edge to develop sweeter-tasting beverages that remove sugar and could make them healthier than their competitors' beverages. For Senomyx this deal is critical because it aligns its sweet flavor products up with a global giant that can introduce it to domestic and foreign markets. It'll still be a little while before Senomyx turns the corner to profitability, but I'd consider it worth a closer look on any extensive dips.

Finally, in-flight Internet and connectivity supplier Gogo (NASDAQ:GOGO) ascended 5.9% after receiving positive commentary from research firm UBS. According to covering analyst John Hodulik, who raised his full-year revenue forecast, but lowered Gogo's full-year EBITDA outlook due to the expectation of higher capital expenditures, Gogo represents an attractive wireless play because of its long-term airline contracts and consumers' want to stay connected, even while flying.

Source: Gogo investor presentation. 

On the heels of this report, UBS upgraded Gogo to a "buy" rating from "neutral" but simultaneously lowered its price target to $23 from $26. Although I often feign from placing much faith in analyst ratings, I believe Hodulik hit the nail on the head here that Gogo is set up to outperform for the long-run, but that losses are going to continue for the next couple of years. Patient investors who wait for moderate pullbacks could be rewarded here.

InterMune, Senomyx, and Gogo all soared today, but it'll likely be difficult for them to keep pace with this top stock over the long run
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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. 

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.

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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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