Last Week's 5 Smartest Stock Moves

These five companies got it right.

Jul 28, 2014 at 11:53AM

If you're feeling good about the market, you're not alone. Take my hand as we go over some of last week's more uplifting headlines.

1. Earnings with integrity
Running an eatery has been a pretty hard gig for most chains these days, but thankfully Chipotle Mexican Grill (NYSE:CMG) has been a cut above the rest. The country's favorite burrito roller posted blowout quarterly results last week. 

Revenue climbed 29% to top $1 billion, fueled by an amazing 17.3% spike in comps. Earnings per share climbed 24% to $3.50, blowing past the $3.09 that Wall Street was forecasting. Chipotle was a consistent world-beater in its prime, but this is actually the first time in a year that the fast-growing chain has landed ahead of analysts on the bottom line. 

2. You should see the surgical robotic arm's golf swing
Intuitive Surgical (NASDAQ:ISRG) was an analyst darling last week. Stifel Nicolaus and Raymond James upgraded the company behind the da Vinci surgical robotics system after it posted better-than-expected quarterly results. 

Intuitive Surgical's numbers may not seem inspiring at first glance. Revenue took a double-digit percentage hit, with earnings sliding even more. However, global procedures performed did increase 9% from a year earlier and 8% sequentially. Profitability of $3 per share trounced the $2.83 per share that analysts were forecasting. Positive buzz for the new da Vinci Xi platform is the cherry on top for Wall Street pros to begin warming up to Inuitive Surgical again.

3. Born on the Baidu
Expectations were high for Baidu (NASDAQ:BIDU) heading into Thursday night's earnings report, especially after the stock soared past $200 for the first time after a timely Morgan Stanley upgrade. Well, China's leading search engine was more than up to the task.

Revenue soared a better-than-expected 59% to $1.93 billion, but the real surprise came on the bottom line, where adjusted earnings soared 38%. Analysts were only holding out for a single-digit percentage advance, banking on Baidu's forays into lower-margin online specialties to weigh on its profitability. Baidu managed to grow just fine, and its top-line outlook for the new quarter is also comfortably ahead of where the pros are perched.  

4. American beauty
The airline industry is flying high again, and American Airlines Group (NASDAQ:AAL) is sharing the wealth with a $1 billion stock buyback and a new quarterly dividend. American Airlines' commitment to cut checks every three months for $0.10 a share is a pretty big deal. It hasn't paid out a dividend since 1980. However, last year's merger with US Airways has started to pay off sooner than anyone expected. 

The industry is growing as passengers pay more while fuel prices hold steady, improving the prospects for most of the leading -- and formerly bleeding -- air carriers. On Thursday American Airlines reported a net profit excluding net special charges of $1.5 billion for its latest quarter -- a record for any quarter in its history. 

Investors have been burned by the volatile industry before, but ignoring the robust fundamentals and game-changing consolidation could be just as dangerous for investors dismissing the opportunity.

5. Google wants to be the king of all media
As if a $35 streaming-video device weren't enough of a good deal, Google (NASDAQ:GOOG) is sweetening its Chromecast's value proposition by rewarding owners with three free months of Google's All Access Music.

This is a smart move by Google. It has sold millions of Chromecast devices, but its Spotify-like on-demand music service has been a hard sell at $10 a month. This free trial can potentially introduce All Access to millions of new users. 

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Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Baidu, Chipotle Mexican Grill, Google (C shares), and Intuitive Surgical. The Motley Fool owns shares of Baidu, Chipotle Mexican Grill, Google (C shares), and Intuitive Surgical. 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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