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Why Tesla, Social Capital Hedosophia Holdings, and ResMed Jumped Today

By Dan Caplinger - Oct 25, 2019 at 4:26PM

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Markets finished the week on a positive note.

Major benchmarks moved higher on Friday, lifted by continued strong results for the majority of companies reporting third-quarter earnings. Geopolitical and macroeconomic issues have faded into the background as investors have largely paid attention to issues at the individual-company level, and on the whole, businesses have seen solid results in recent months. Some companies saw their shares continue to gain ground on several types of good news. Tesla (TSLA 3.89%), Social Capital Hedosophia Holdings (IPOA), and ResMed (RMD 2.87%) were among the top performers. Here's why they did so well.

Tesla stays in high gear

Shares of Tesla rose 9.5%, adding to their big gains from Thursday following the electric-vehicle manufacturer's surprise profit in the third quarter. Analysts weighed in with their opinions on Friday, with pros at Barclays raising their target price by $50 per share. Barclays still has doubts about Tesla's long-term prospects, and it kept its underweight rating on the stock. Moreover, its new target of $200 per share is still well below the current stock price. Yet even the bearish analyst company acknowledged that it's hard to go against overwhelmingly positive investor sentiment on Tesla in the short run, and with some bullish institutional investors keeping their positions in the automaker, it's possible further share-price gains are yet to come.

Red Tesla Roadster on a road in a desert landscape near sunrise or sunset.

Image source: Tesla.

Virgin Galactic to come public through Social Capital Hedosophia

Social Capital Hedosophia Holdings stock climbed 11% as investors prepared for the special purpose acquisition company to help Richard Branson's Virgin Galactic go public. Social Capital Hedosophia has already gone through the IPO process, but by acquiring a stake in Virgin Galactic, the space tourism company will be able to gain access to regular investors directly without doing what most companies do prior to initial public offerings. Space tourism has a lot of potential and plenty of risk, but investors have been happy with Branson's past successes and are hopeful that Virgin Galactic will pay off in the long run for early shareholders.

ResMed looks healthy

Finally, shares of ResMed gained 13%. The medical device specialist said that fiscal first-quarter revenue and adjusted net income both rose 16% from year-earlier levels. ResMed saw particular strength in its software-as-a-service segment, which benefited from the acquisition of electronic health records specialist MatrixCare. Sleep apnea has been an area of concern in the healthcare community lately, and the company's innovative devices have been instrumental in helping patients confront the disease. ResMed expects to help a quarter billion people make their lives better by 2025, and the company's already well on its way toward reaching that goal.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool owns shares of Social Capital Hedosophia Holdings. The Motley Fool recommends ResMed. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Tesla, Inc. Stock Quote
Tesla, Inc.
TSLA
$883.07 (3.89%) $33.07
ResMed Inc. Stock Quote
ResMed Inc.
RMD
$243.58 (2.87%) $6.80
Social Capital Hedosophia Holdings Stock Quote
Social Capital Hedosophia Holdings
IPOA

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

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