Why Synaptics, Ulta Salon, and Northwest Biotherapeutics Are Today's 3 Best Stocks

The S&P 500 suffers its worst loss in weeks even as Synaptics, Ulta Salon, and Northwest Biotherapeutics shares all soar by double digits.

Jun 11, 2014 at 5:15PM

We knew that a "real" down trading session was around the corner for the broad-based S&P 500 (SNPINDEX:^GSPC), and it finally arrived on Wednesday -- though who knew that it would come on a day when the both pieces of U.S. economic data were positive?

Longview

Perhaps the biggest economic news of the day was the Mortgage Bankers Association's release of its weekly origination numbers. This figure, which examines refinancing and new home loan application activity from the previous week, soared by 10.3%, signaling that mortgaging servicing activity may be on the rebound after a late-2013 swoon. Investors are going to want to see this figure improve, as it would be disconcerting if consumers are avoiding refinancing and taking out new home loans with lending rates still near historic lows.

Also in the positive column was a smaller month-over-month Treasury budget deficit of $130 billion. On the surface, $130 billion may seem like an enormous shortfall, which could be one reason why stocks went to the downside today. However, this is down nicely from the $138.7 billion deficit reported in April.

By day's end profit-takers handily outweighed optimists and pushed the S&P 500 down by 6.9 points (-0.35%) to close at 1,943.89. Despite the drop, three companies screamed to the upside by double-digit percentages.

Images

Synaptics (NASDAQ:SYNA), a developer of tech-based human interface solutions, was today's biggest individual gainer, rising 29% after announcing the acquisition of Renesas SP Drivers, the sole supplier of Apple's iPhone display driver chips. Synaptics will pay $475 million for Renesas, with an expected close date in the fourth quarter. Synaptics is financing the deal with a mix of cash on hand and debt financing. The deal itself should greatly improve Synaptics' human interface products portfolio and will be immediately accretive to adjusted earnings per share.

In a separate press release, Synaptics boosted its fourth-quarter revenue forecast to a range of $300 million-$310 million from a prior forecast of $275 million-$295 million, reflecting a top-line increase of 30%-35%. Synaptics' guidance raise comes on the heels of better than expected performance in both its PC and mobile products segments. With today's buyout looking like an instant win for investors, Synaptics' run may not be done.

Beauty supply and fragrance retailer Ulta Salon (NASDAQ:ULTA) shot higher by 13.8% after reporting better than expected first-quarter results.

Www
Source: Kanko*, Flickr.

For the quarter, Ulta delivered 22.5% sales growth to $713.7 million and comparable-store growth of 8.7%, compared to "just" 6.7% comparable-store growth last year. Direct-to-consumer sales also soared by 72.3%. On an adjusted earnings basis, EPS increased 18.5% to $0.77. Wall Street had expected just $699.7 million in sales and $0.74 in EPS. While it's tough to argue against Ulta's superior growth rate, its forward P/E of 22 may not leave a lot of room for further upside. I'd certainly suggest adding the stock to your watchlist, but I'd patiently wait for a pullback before even considering taking a position.

Lastly, Northwest Biotherapeutics (NASDAQ:NWBO) gained 11.9% after reporting additional positive data on DCVax-Direct in a phase 1/2 study involving patients with inoperable solid tumors. According to its early morning press release, all nine patients who have received the fourth of six injections have shown some degree of response, including tumor shrinkage, tumor cell necrosis, and/or disease stabilization. Overall, 13 of 20 patients who have had at least three injections have demonstrated some level of response to the treatment. The good news here is that as the six-injection treatment course progresses this response figure may rise. What will ultimately matter, though, is overall survival in later-stage studies. I'd consider holding off on the celebration until all the data is in, but I would strongly suggest you add NW Bio to your watchlist.

These 3 stocks may have soared today, but it's unlikely they'll be able to outperform this top stock over the long run
Give us five minutes and we'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

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 Apple. It also recommends Ulta Salon, Cosmetics & Fragrance. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

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.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

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. It's also featured on several dozen 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 ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers