Why International Game Technology, Family Dollar, and Newfield Exploration Soared Last Week

These stocks crushed the S&P 500's losing return.

Jun 14, 2014 at 11:33AM

The S&P 500 (SNPINDEX:^GSPC) broke its weekly winning streak, falling 13 points or about two-thirds of a percent on the week. Worries about global economic growth continued to weigh on the market, and worsening conditions in Iraq made many investors think that the Middle East could become the unexpected catalyst that might bring on a long-awaited correction for the stock market. Yet regardless of the downward pressure on the S&P 500 broadly, shares of International Game Technology (NYSE:IGT), Family Dollar (NYSE:FDO), and Newfield Exploration (NYSE:NFX) all made impressive gains on the week.


International Game Technology soared 27% on the week, as investors applauded the slot-machine maker's moves to put itself up for sale. Early in the week, just the positive step of getting investment-banking advisors in its corner was enough to send International Game Technology's stock sharply higher. But surprisingly, the company moved extremely quickly to gather interest from potential buyers, with an auction-bidding process revealing a number of parties willing to consider a merger seriously. It now looks as though a possible deal could come in very short order, with an efficient process having reaped quick rewards for International Game Technology's shareholders.


Family Dollar climbed almost 11% as activist investor Carl Icahn took a 9% position in the dollar-store retailer. Even though the economic recovery has been relatively sluggish for the lower-income customers that tend to gravitate to Family Dollar and its dollar-store peers, intense competition within the industry has made it hard for Family Dollar to stand out from the crowd and produce the same returns that dollar stores gave investors during the last recession in 2008. Icahn's plan involves seeking consolidation within the industry, following the lead of other sectors of the stock market in which post-merger survivors have had a much better time generating profits. If successful, making Family Dollar a merger candidate could be the key to investors' long-term success.

Newfield Exploration gained 8.5%. Energy stocks were a bright spot in a dim market environment this week, as the conflict in Iraq boosted oil prices. Many see Newfield Exploration as one of the shining stars in the U.S. energy industry, having divested itself of its international assets in order to focus squarely on its opportunities in the domestic market. Key assets in the Williston Basin / Bakken region and the Eagle Ford shale play give Newfield a solid base, and opportunities elsewhere across the country have plenty of growth potential to carry Newfield further still.

After this week's losses, investors seem much less certain about the S&P 500's eventual trajectory. Even though just a week ago, many expected S&P 2,000 in short order, it could now take a long while before the S&P reaches that key level.

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Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. 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.

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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