Conn's and Home Depot Shine As Home Sales Come Back to Life

Myriad Genetics, despite new data backing up its gene-based prostate cancer test Prolaris, falls for a third straight day Thursday

May 22, 2014 at 7:12PM

The stock market woke up on the wrong side of the bed Thursday, selling off after last week's jobless claims data painted an unflattering picture of the economy. Just hours later, however, investors sent stocks back to breakeven territory, where the Dow Jones Industrial Average (DJINDICES:^DJI) managed to tread water for the remainder of the day. Home Depot (NYSE:HD) finished as the best blue chip performer today, while consumer goods retailer Conn's (NASDAQ:CONN) and molecular diagnostic company Myriad Genetics (NASDAQ:MYGN) ended as some of Wall Street's biggest movers. The Dow, for its part, tacked on 10 points, or 0.1%, to end at 16,543.

Home Depot added 0.9% Thursday as investors breathed a sigh of relief upon seeing existing home sales edge higher in April. It was only the second such increase in the last nine months, and existing home sales last month were still nearly 7% lower than they were in April of last year. Few companies in the world have more skin in the U.S. real estate game than the $107 billion Home Depot, so it's reassuring from an investor's standpoint to see transactions picking up again. Of course, Home Depot isn't the only company in the business of home improvement, and whether or not it has the upper hand on Lowe's is another question entirely.

Specialty retailer Conn's is a somewhat more indirect beneficiary of a robust real estate market, and its shares rocketed 5.7% higher today. Conn's, worth $1.6 billion by Wall Street's estimations, is a far cry from Home Depot's 12-digit market cap, making the stock much more volatile and risky than any of the Dow components -- something evidenced in the stock's precipitous 41% post-earnings plunge in February. But with great risk comes great potential for reward, and hedge fund icon David Einhorn even initiated a position in the company recently. Conn's is constantly tweaking its product mix to keep with the times, and recently got Tempur-Pedic Mattresses into all its locations; it might be worth taking a look at it if the real estate market keeps chugging along, so don't sleep on it!


Source: Myriad Genetics

Lastly, Myriad Genetics stock took a pounding on Wall Street today, slumping 4.8%. Sometimes -- and as you probably know from your own experience -- stocks can make big moves for little or no good reason. This was certainly the case with Myriad Genetics today, which has now lost more than 10% in three days, a sell-off seemingly triggered by what was actually good news. Myriad's Prolaris test, used to give the mortality risk for prostate cancer, now has data (as of Tuesday) showing that Prolaris was effective and able to do what it claimed. Despite this groundbreaking new medical technology, short interest in the stock has rarely been higher. At the end of April it would've taken shorts 25 days to cover their positions, an astronomical difference from the 3 days it would've taken them just a year ago.

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John Divine has no position in any stocks mentioned. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.

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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.

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.

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