Why Under Armour, Nokia, and Trulia Are Today's 3 Best Stocks

Earnings season pushes UA and Nokia higher on a slow day for the market.

Jul 24, 2014 at 5:20PM
Daily Fool

A slow day from the markets didn't stop today's top movers, but the S&P 500 (SNPINDEX:^GSPC) crept its way to a gain of just 0.05%, or less than one point, to hold steady below the 2,000-point mark. Earnings season marched on with another slate of major reports today; but the biggest news early on in the market's day came out of China.

Beijing sparked a new round of optimism among economists concerned over China's recent slowing GDP growth today as the country's flash Purchasing Manager's Index, a measure of manufacturing activity, jumped to an 18-month high. At a reading of 52%, China's flash PMI showed healthy expansion in manufacturing at a full two points above the breakeven level of 50% that marks neither expansion nor contraction. More positively, today's recording indicated that expansion jumped by more than a full percentage point above June's final record of 50.7%.

Forbidden City Gate

China's Gate of Heaven in the Forbidden City. Source: Wikimedia Commons.

China's in no way out of the woods yet for international investors eager to capitalize on recent weakness in Asia's largest economy. Beijing's barely clinging to 7.5% annual GDP growth, the country's long-term target for economic stability, while the hard-hit housing market and receding foreign investment have pressured the Chinese market. However, easing measures and looser credit have spurred hope that the economy will continue its growth through the end of 2014, particularly as the U.S. and European markets gain momentum. This is a trend that would go a long way to boosting the Chinese export sector, a major growth driver of the country's economy. It's a wait-and-see game in China, however, as Beijing, so far, has refrained from more substantive easing measures.

The market today keyed in on earnings more than China, however -- and it was strong earnings reports that buoyed two of today's top stocks, with both Nokia (NYSE:NOK) and Under Armour (NYSE:UA) soaring up the charts.

Under Armour Logo

Source: Wikimedia Commons

Under Armour came through in the clutch with its earnings today, notching astronomical 34% year-over-year revenue growth in its most recent quarter en route to a 14.7% stock gain. While the athletics retailer's earnings were flat through the second quarter, Under Armour hiked both its operating income and revenue outlooks for the full year -- the latter in a big way, with the company boosting its revenue guidance from a 25% full-year gain to a 29% increase.

This athletics giant has made a habit of reeling in superb growth as of late, but it's perhaps internationally where Under Armour's connecting with its biggest hits. International sales only represent 8% of the company's overall revenue, but jumped by a sterling 80% year over year in the most recent quarter. North America still dominates Under Armour's financials, but if this juggernaut can continue making inroads overseas, it will be in prime position to challenge chief rival Nike on a global scale -- something that bodes well for a stock that's already shot up by 96% during the past year.

Nokia also called in a great performance this earnings season as the stock jumped by 8.2%. Even after the company sold off its wireless business to Microsoft in a $7.5 billion deal earlier this year, Nokia still managed to post earnings of $0.06 per share, a mark that topped analyst projections. Services took a beating in the quarter, with a 19% revenue drop, but sales of equipment spiked by 6%.

While developed markets are hurting Nokia's financials, China has become a huge growth driver for this company. Overall revenue from Asia's largest market climbed 18%. That's managed to keep the company's operating margins above estimates as it charts a post-wireless life. If China can continue providing strong growth while Nokia searches to turn around in developed markets, this stock may be a surprise in waiting, even without its wireless unit.

Perhaps the best stock of the day wasn't boosted by earnings, however. Real estate website operator Trulia (NYSE:TRLA) erupted for a 32.4% gain today after reports emerged of rival Zillow's (NASDAQ:ZG) interest in a possible takeover. Zillow's stock posted its own impressive run on the news in jumping by more than 15% today. While any deal is only in a reported stage as of now, a possible merger could result in a combined company dominating the online real estate listing space. Bloomberg reported 85 million visitors to the two sites combined last month, per data from ComScore.

Trulia is already rising in a big way, with revenue at the company projected to climb by 76% through the full year. If Zillow's interest becomes more than just reports, however, shareholders could be in for an even more welcome surprise.

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Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Nike, Under Armour, and Zillow. The Motley Fool owns shares of Microsoft, Nike, Under Armour, and Zillow. 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.

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. 

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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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