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?


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.


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.

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
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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.

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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."

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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." 

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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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