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Why SandRidge Energy, Atara Biotherapeutics, and Hovnanian Enterprises Jumped Today

By Dan Caplinger - Dec 29, 2017 at 4:33PM

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Find out how these stocks managed to avoid Friday's minor market slump to end the trading year with a bang.

This has been an extraordinary year for the stock market; its fairly steady climb left 2017 one of the most successful periods of this 9-year-long bull market. Yet Friday brought an anticlimactic end to the trading year. Major market benchmarks finished modestly lower, mostly reflecting low levels of trading activity heading into the long New Year's weekend. Despite the overall trend, though, some company-specific good news sent certain shares markedly higher. SandRidge Energy (SD 2.97%), Atara Biotherapeutics (ATRA 5.54%), and Hovnanian Enterprises (HOV 3.48%) were among the best performers on the day. Below, we'll look more closely to tell you why these stocks did so well.

SandRidge breaks off its buyout

Shares of SandRidge Energy gained 10% after the energy company decided to terminate its offer to  purchase peer Bonanza Creek Energy. SandRidge stock fell dramatically after the initial announcement of the $746 million bid back in November, and billionaire activist investor Carl Icahn had led a group of institutional investors opposing the buyout. SandRidge will have to pay Bonanza Creek $3.7 million as a termination fee under the terms of their agreement, but SandRidge shareholders are breathing a sigh of relief that they'll avoid what could have become another ill-timed purchase that would have left the company cash-poor at a critical time for the energy industry.

SandRidge logo on a wood-colored sign, with brush and industrial buildings in the background.

Image source: SandRidge Energy.

Atara to move forward with trials

Atara Biotherapeutics jumped almost 19%  after revealing that the U.S. Food and Drug Administration had granted it clearance to start to phase 3 clinical studies with its candidate drug tabelecleucel in patients with a form of Epstein-Barr virus-associated post-transplant lymphoproliferative disorder. The trials for the drug (formerly known as ATA129) will look at certain patients who've had solid organ transplants or allogeneic hematopoietic cell transplant. Atara expects results in the first half of 2019. The company's stock has languished ever since a disappointing trial result from another drug in late 2015, so shareholders' hopes are riding on Atara succeeding this time around.

Hovnanian makes a deal

Finally, Hovnanian Enterprises picked up 8 %. The homebuilder announced that it had gotten financing commitments from GSO Capital Partners and other sources that will help it refinance portions of its existing debt. Hovnanian intends to use longer-term financing to pay down securities that will mature within the next two years, giving it until 2026 or later before it has to repay its creditors. The lenders also agreed to provide new credit facilities of $125 million, giving it more capacity than its existing $75 million facility. Investors are pleased that the homebuilder is taking steps to improve its balance sheet, especially amid uncertainty about the strength of the U.S. housing market in 2018 and beyond.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Hovnanian Enterprises, Inc. Stock Quote
Hovnanian Enterprises, Inc.
$48.50 (3.48%) $1.63
Atara Biotherapeutics, Inc. Stock Quote
Atara Biotherapeutics, Inc.
$4.95 (5.54%) $0.26
SandRidge Energy, Inc. Stock Quote
SandRidge Energy, Inc.
$18.01 (2.97%) $0.52

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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