Why Broadcom, Joy Global, and Under Armour Sent the S&P Soaring Last Week

Find out which stocks sent the S&P 500 to all-time highs.

Jun 7, 2014 at 11:33AM

Last week, the S&P 500 (SNPINDEX:^GSPC) jumped almost 26 points, or about a percent and a third, and set new daily closing record highs on every single day except Tuesday. With investors having put first-quarter earnings season behind them and now focusing on prospects for mid-year earnings reports, economic data and policy are getting more attention, and favorable news on U.S. jobs and policy moves from the European Central Bank helped send many stocks higher. Within the S&P, Broadcom (NASDAQ:BRCM), Joy Global (NYSE:JOY), and Under Armour (NYSE:UA) were the best performers on the week.

BRCM Price Chart

S&P 500 Price data by YCharts

Broadcom climbed close to 20% as the chip company made a bold strategic decision, choosing to stop playing in the cellular baseband chip market. Although Broadcom had hoped to become a competitive force in the niche, the company had failed to stand up to its primary rival, and giving up on cellular baseband should save Broadcom hundreds of millions of dollars in research and development and overhead expenses related to the endeavor. Even though the loss of revenue will make overall sales look ugly in future quarters, the actual hit to the bottom line shouldn't be nearly as severe, and in the long run, the move will give Broadcom greater financial flexibility to pursue more promising areas in the future.

Joy Global picked up 12% as investors and analysts alike looked to a potential bottoming process for the mining-equipment maker. Joy Global has suffered for a long time due to low prices for commodities, especially coal, which have led mining companies to cut their capital expenditures and reduce purchases of mining equipment. But even though Joy Global's earnings report from earlier this week showed that revenue dropped 32% from year-ago levels, bookings came in just 7% lower, and bookings in surface-mining equipment actually jumped 34% from 2013 levels. It's far too early to say that Joy Global is out of the woods, but value investors are starting to look more seriously at the company as a candidate for bottom-fishing.

Source: Under Armour.

Under Armour gained 10%, with most of the athletic apparel-maker's gains coming after analysts upgraded the stock at midweek. Even though Under Armour is much smaller than its chief rival in the athletic industry, the upstart has had increasing success catering to a new generation of young shoppers, and its efforts to woo women while keeping its male customer base have reaped rewards as well. As Under Armour looks to compete on the global stage, shareholders hope that its success in the North American market can translate to a worldwide challenge against what has been a dominant opponent for decades.

The S&P appears aimed squarely at 2,000, but that's still a good distance away. Investors need to watch whether these three stocks can keep gaining ground and lift the S&P 500 to a new milestone.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Under Armour. 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.

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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