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Why Bunge, Kirby, and China Southern Airlines Jumped Today

By Dan Caplinger - Feb 5, 2018 at 4:32PM

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On a terrible day for the market, these stocks gained ground. Find out why.

Monday was another terrible day for the stock market, as the Dow surpassed its Friday slump by posting a decline of more than 1,100 points. Investors seem to have decided that this could be the long-awaited correction, and the S&P 500 has already fallen more than 5% from its highs, qualifying as a minor pullback at least. Just how far things will continue to fall remains to be seen, but bullish investors noted that the rise in 10-year Treasury yields late last week has reversed itself with modest declines today. A few stocks managed to post solid advances, and although "jump" might seem like a stretch for some of these gains, it was still the case that Bunge (BG 0.85%), Kirby (KEX -2.81%), and China Southern Airlines (ZNH 1.09%) were among the best performers on the day.

Bunge looks at a buyout

Shares of Bunge climbed almost 4% on speculation that the agricultural specialist might receive a takeover bid in the near future. Reports surfaced that Archer Daniels Midland (ADM 1.65%) might make an offer to purchase its smaller peer, with analysts pointing to the need for consolidation in an industry that features razor-thin margins. Bunge has seen a nice recovery for the stock after a couple of years of weakness in agriculture, and it'll be interesting to see what kind of takeover premium ADM might have to offer in order to get Bunge shareholders on board with a buyout bid.

Worker watching grain drop into a milling facility.

Image source: Bunge.

Kirby keeps on shipping

Kirby stock rose 3% after the operator of river barges and other marine transportation vessels agreed to purchase an industry peer. Kirby will pay $419 million in cash for Higman Marine, which has a fleet of 159 inland tank barges and 75 inland towboats. Higman concentrates largely on oil and natural gas, and its vessels can carry about 4.8 million barrels of petroleum products. Kirby believes the timing is ideal both in terms of the recovery in the shipping market and with oil prices on the rise, and investors agree that the company seems to be capitalizing on a timely opportunity.

China Southern flies higher

Finally, shares of China Southern Airlines finished up 5%. The airline, which carries more passengers than any of its peers in Asia, said that it believes that passenger yields will keep climbing in 2018. As the ranks of the consumer class in China and other countries in Southeast Asia grow, demand for travel is rising sharply, and China Southern is in a good place to deliver on providing capacity for passengers. With its finger on the pulse of one of the best growth markets in the industry, China Southern looks well-positioned to keep gaining altitude if there aren't any macroeconomic or geopolitical shocks in the near future.

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Stocks Mentioned

Bunge Limited Stock Quote
Bunge Limited
BG
$91.48 (0.85%) $0.77
China Southern Airlines Company Limited Stock Quote
China Southern Airlines Company Limited
ZNH
$28.64 (1.09%) $0.31
Kirby Corporation Stock Quote
Kirby Corporation
KEX
$60.98 (-2.81%) $-1.76
Archer-Daniels-Midland Company Stock Quote
Archer-Daniels-Midland Company
ADM
$77.24 (1.65%) $1.25

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

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