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Why Cliffs Natural Resources, TransAlta, and Amaya Jumped After the Holiday

By Dan Caplinger – Nov 28, 2016 at 9:02AM

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The stock market kept hitting new records, and these stocks led the way. Find out why.

The day after Thanksgiving is often a quiet one for the stock market, and major market benchmarks continued to sustain their momentum in finishing the week on a positive note. The Dow and S&P 500 once again set new record highs, rising roughly a third of a percentage point. But some stocks did even better in post-holiday trading, and Cliffs Natural Resources (CLF 0.78%), TransAlta (TAC 1.55%), and Amaya (TSG) were among the best performers in the abbreviated Friday session. Below, we'll look more closely at these stocks to tell you why they did so well.

Image source: Cliffs Natural Resources.

Cliffs keeps riding the infrastructure wave higher

Cliffs Natural Resources climbed 8% as excitement about the iron ore provider continued to build. The stock has soared since the presidential election earlier this month, as some economists are predicting a big ramp-up in construction and infrastructure development activity. The iron ore market has already rebounded from its worst levels earlier in the year, and if demand for steel rises as a result of new government and private-sector initiatives to spur building, then that should keep prices strong for the raw materials that go into steel production. The stock fell just short of the $10 per share mark, but in hitting its best levels since late 2014, Cliffs Natural has shareholders feeling hopeful once again.

TransAlta soars on agreement

TransAlta climbed by 25% after it announced on Thanksgiving Day that it had entered into an agreement with the Albertan government concerning transition payments connected to coal-fired power plants. The deal will involve TransAlta collaborating with the provincial government and cooperating to develop a policy framework to convert coal-fired plants to natural gas in the long run, confirming a 2030 timeframe for TransAlta's coal-fired plants to make the move to gas-fired electrical generation. CEO Dawn Farrell applauded the move, saying it was "the culmination of the collaborative work we have been doing with the provincial government over the past year." By eliminating uncertainty related to the eventual fate of its assets in Alberta, TransAlta has successfully found a balance between environmental concerns and affordable, economically viable production, and investors are happy that the company managed to reach agreement.

Amaya buyout looks more likely

Finally, Amaya rose 8%. The global gaming and interactive entertainment technology company has seen big ups and downs this week, as the fate of company founder David Baazov's bid to take Amaya private suffered a setback. Earlier in the week, a set of investors in Dubai had said that they had never truly committed to providing financial support for Baazov's takeover, sending the stock down sharply. However, on Friday morning, Baazov disclosed that he had found two investment funds in Hong Kong to provide the necessary funding, making investors more comfortable that the $4.1 billion deal is still a go. Even with today's gain, though, the $15 share price is still well below the cash bid of 24 Canadian dollars per share, which works out to roughly $17.75 per share in U.S. dollars.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of Cliffs Natural Resources. 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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