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Why ConocoPhillips, Alder BioPharmaceuticals, and SemGroup Jumped Today

By Dan Caplinger – Sep 16, 2019 at 4:32PM

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A big jump in oil prices sent the market down, but these stocks bucked the trend.

Monday was a poor day for the major benchmarks, as market participants reacted negatively to news from the Middle East. A drone attack on oil production facilities in Saudi Arabia sent shockwaves across the global economy, and many now fear that higher energy prices could further slow economic growth that in turn could cause more trouble for financial markets. However, some stocks benefited from more favorable conditions. ConocoPhillips (COP 7.46%), Alder BioPharmaceuticals (ALDR), and SemGroup (SEMG) were among the top performers. Here's why they did so well.

ConocoPhillips rides oil higher

Shares of ConocoPhillips soared 9% on Monday, making it one of the biggest beneficiaries among major energy players of oil's move higher. Crude rose by more than $7.50 per barrel to around $62.50, boding well for Conoco's prospects for future profit growth. Investors had worried that the oil producer might get left behind by more aggressive peers that have been more active in making strategic moves with their asset portfolios. Yet shareholders now seem to appreciate Conoco's patience, and thanks to its discipline, the oil giant has a lot more room to maneuver and take advantage of new opportunities in the energy market as they become available.

Rows of black oil barrels in a white room.

Image source: Getty Images.

Alder gets a bid

Clinical-stage biopharma company Alder BioPharmaceuticals saw its stock skyrocket 84% after it received a buyout bid from industry peer H. Lundbeck. Under the proposed deal, Alder shareholders would receive $18 per share in cash for their stock, as well as a contingent value right worth up to $2 per share extra if Alder migraine drug eptinezumab gains approval from the European Medicines Agency. Lundbeck believes that the purchase will help it bulk up its pipeline of candidate treatments, putting it in better position for long-term success. For Alder, though, the deal's a bit bittersweet, as the stock had traded as high as $50 per share in mid-2015 before losing more than 80% of its value.

Energy Transfer makes a play for SemGroup

Finally, shares of SemGroup jumped more than 60%. The pipeline operator also found itself an acquisition target today, with industry giant Energy Transfer (ET 2.81%) proposing to pay $5.1 billion for SemGroup. Investors would receive $6.80 in cash plus 0.7275 units of Energy Transfer for every SemGroup share they own, which works out to about $17 per share in total based on Friday's closing prices. SemGroup CEO Carlin Conner said that the move represents the culmination of its exploration of strategic alternatives to boost shareholder value, and investors seem to agree that the deal looks like an attractive exit point while still letting them participate in Energy Transfer's potential upside.

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

ConocoPhillips Stock Quote
ConocoPhillips
COP
$109.97 (7.46%) $7.63
SemGroup Corporation Stock Quote
SemGroup Corporation
SEMG
Alder BioPharmaceuticals, Inc. Stock Quote
Alder BioPharmaceuticals, Inc.
ALDR
Energy Transfer LP Stock Quote
Energy Transfer LP
ET
$11.34 (2.81%) $0.31

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