Thursday brought slight declines to the broader stock market, and both the Dow and S&P 500 lost between 0.1% and 0.2% on the day. Most of the attention in the market focused on the healthcare area, and controversy surrounding the pricing practices of pharmaceutical companies had a substantial impact on stocks in the industry.
Yet with Fed Chair Janet Yellen expected to give a speech at the international Jackson Hole conference tomorrow, investors seemed unwilling to let the market make major moves in either direction. Even though broad indexes remained near the unchanged level, some stocks were able to gain a lot of ground. Among the best performers were Tiffany (NYSE:TIF), AEP Industries (NASDAQ: AEPI), and Vanda Pharmaceuticals (NASDAQ:VNDA).
Tiffany sees high-end retail return
Tiffany climbed 6% after the jewelry company released its second-quarter financial report. At first glance, one might have thought that the jeweler had a bad quarter, with total revenue falling 6% on an 8% drop in comparable-store sales. However, Tiffany managed to boost its bottom line by 1%, to $106 million, producing earnings of $0.84 per share, which was $0.12 higher than the consensus forecast among those following the stock.
Moreover, operating margin figures at Tiffany were stronger than expected, and the jewelry company reaffirmed its previous guidance for the full fiscal year. The fact that Tiffany gained ground today shows just how low the expectations for the retail sector have been, especially among those companies that target high-end shoppers. Yet any sign of a potential turnaround could help bolster shares further in the future as the holiday shopping season approaches.
AEP Industries gets an offer it can't refuse
AEP Industries soared 44% in the wake of getting a buyout deal from Berry Plastics Group (NYSE:BERY). The manufacturer of flexible plastic packaging film and other products will fetch $765 million from Berry, which offered AEP shareholders the option to accept either Berry stock or cash totaling a value of $110 per share, subject to an overall 50/50 split between cash and stock. The jump took AEP above the $110 mark, but that reflects the fact that Berry stock also climbed on news of the deal, posting a 5% gain by the end of the session.
AEP CEO Brendan Barba said, "Berry is the right partner to expand our product portfolio to deliver high-quality packaging films to even more customers around the world." Investors seem to agree that greater opportunities could be available for both AEP and Berry in the future.
Vanda wins a patent battle
Finally, Vanda Pharmaceuticals gained more than 20%. The maker of schizophrenia medication Fanapt said that it had won a ruling against Roxane Laboratories, finding that Roxane had infringed Vanda patents by submitting an abbreviated new drug application to the U.S. Food and Drug Administration before the patents had expired. The court found two separate patents to be valid and issued an injunction against Roxane, preventing further marketing efforts of the generic until late 2027.
Given the importance of protecting key treatments to small companies like Vanda, it's not surprising that the stock reacted so favorably to the good news.