Why Amedisys, LightInTheBox, and Manitowoc Are Today's 3 Best Stocks

The S&P trudges its way to a small gain, while Amedisys, LightInTheBox, and Manitowoc surge by double-digit percentages.

Jun 27, 2014 at 5:15PM

The broad-based S&P 500 (SNPINDEX:^GSPC) may continue to pull rabbits out of its economic hat in order to justify new all-time highs, but this week went to the bears. The iconic index advanced on Friday, but ended the week slightly lower.


The big news event of the day was the end-of-the-month release of the Thomson Reuters/University of Michigan consumer confidence figure, which came in at a reading of 82.5 for June. This compares favorably with the reading of 81.2 for May, and essentially matched the Street's consensus estimates. Rising consumer confidence signals a more positive short-term and long-term economic outlook for consumers, and may be enough to entice them to spend more. Since our economy is so intricately tied to consumer spending, a rising consumer confidence reading might signal that consumption is about to surge higher.

Despite this positive data, the S&P 500 spent most of its day in negative territory before trudging its way higher by 3.74 points (0.19%), to close at 1,960.96. The index is now up in eight of the past 11 sessions.

Topping all individual stock gainers today was home health and hospice care provider Amedisys (NASDAQ:AMED), which advanced 29.8% after it favorably updated its second-quarter guidance. Following care-center consolidation, as well as general and administrative expense cuts, Amedisys announced before the opening bell that it now anticipates reporting $300 million-$305 million in revenue, and $0.15-$0.20 in operational EPS for the quarter. Comparatively, Wall Street was looking for breakeven EPS, and close to $297 million in revenue, so this was a sizable beat.

Source: MyFuture.com, Flickr.

However, as I mentioned earlier today, getting a read on home-health stocks like Amedisys can be challenging. While an aging and growing population should create ample opportunities for the home-health sector to grow over the long run, cuts in Medicare and Medicaid stemming from the passage of the Affordable Care Act, and spending cuts in Congress could weigh on companies like Amedisys going forward.

Not far behind Amedisys was China-based e-commerce retailer LightInTheBox (NYSE:LITB), which gained 25.6% after it, too, raised its second-quarter guidance. Shortly before the opening bell, LightInTheBox announced that it now anticipates $86 million-$88 million in revenue for Q2, implying year-over-year sales growth of 19%-22%, up from its prior forecast of $84 million-$86 million. By comparison, Wall Street was forecasting just $84.8 million in revenue. LightInTheBox attributed its improved performance on improved product offerings and enhanced customer experiences with the site. While always cautious of Chinese small caps, I'd certainly suggest adding LightInTheBox to your watchlist, as its growth potential is intriguing. If it can successfully turn the corner to profitability next year as expected, it could be quite the bargain at its current price.


Source: Free photos & art, Flickr.

Finally, Manitowoc (NYSE:MTW), a supplier of industrial cranes and foodservice equipment, added 10.8% on the day after investment firm and Manitowoc shareholder Relational Investors suggested that Manitowoc spin off or sell its foodservice business. As my Foolish colleague Travis Hoium pointed out earlier, investors reacted strongly to the fact that Manitowoc retained Goldman Sachs as its advisor, meaning the company is taking the prospect of a sale or spinoff very seriously. If Manitowoc were able to separate its two businesses, it's likely that shareholder value would be created simply from investors getting a more transparent view of where and how the company generates its sales and profits. At a trailing 12-month P/E of 36, this might be Manitowoc's only chance to head higher in the near term, as its shares look fully valued otherwise.

These three stocks delivered hefty gains today, but keeping pace with this Warren Buffett darling stock over the long run may prove impossible! 
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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.

The Motley Fool recommends Goldman Sachs. 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.

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