Thursday was a largely down day for the stock market, with the Dow Jones Industrial Average taking the biggest hit of the major benchmarks. The global turmoil over trade got a lot closer to home as the U.S. imposed new restrictions that led the Canadian government to issue retaliatory tariffs in response. Yet many broader-based measures of the market fell only slightly, showing that much of what drives the economy isn't as dependent on trade as traditional industrial giants. Good news also sent some key stocks higher. Madrigal Pharmaceuticals (MDGL 1.56%), Brink's (BCO 0.98%), and Applied Optoelectronics (AAOI +0.81%) were among the best performers on the day. Here's why they did so well.
Madrigal sings a pretty song
Shares of Madrigal Pharmaceuticals soared into the stratosphere, leaping more than 140% in the wake of extremely encouraging clinical trial results in a study of the company's MGL-3196 candidate treatment for the liver disease non-alcoholic steatohepatitis. The phase 2 trial showed that Madrigal's drug met the study's primary endpoint of cutting liver fat levels, as well as showing promising improvements in other risk factors like cholesterol, triglycerides, liver enzymes, and fibrosis biomarkers. With several rivals fighting to come out with a treatment for the liver disease, investors today have high hopes that Madrigal will be first out of the gate and make that translate into a profit boom if late-stage trials go equally well.
Image source: Brink's.
This Brink's deal is almost a steal
Brink's stock climbed 16% after making an acquisition of a key industry rival. The security company agreed to buy privately held armored-car cash management operator Dunbar Armored for $520 million in cash, with the deal expected to close by the end of 2018. Brink's was pleased to find a way to invest in a way it believes will generate huge returns, expecting the acquisition to boost adjusted earnings substantially within the next two years. Few had expected that the family-owned Dunbar would ever put itself up for sale, but Brink's hopes that the combined companies will be able to compete more effectively against other industry players.
Applied Optoelectronics gets some love
Finally, shares of Applied Optoelectronics gained 15%. The optical networking specialist got a favorable review from analyst company DA Davidson today, which reiterated its buy rating along with its $50 price target on the stock. Even after having gone through a period of choppiness due to concerns about the sustainability of its growth trajectory, Applied Optoelectronics could be poised to get a big boost in shipment volumes during the second half of this year and into the next. If that happens, then it could easily justify the doubling in the stock's price since early April and keep the optical company's fundamentals looking favorable for the foreseeable future.
