Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
Stocks once again climbed to end the week, with the S&P 500 rising about two-thirds of a percent, and hitting another new all-time record high. But several big stocks posted much more impressive gains, and when a stock climbs more than 10%, there's usually a good reason why. Let's take a closer look at Chipotle Mexican Grill (CMG 0.41%), Google (GOOG 0.41%), and SolarCity (SCTY +0.00%) to find out why they did so well today.
Chipotle Mexican Grill posted a 16% gain after announcing a big jump in revenue for the third quarter. Although its earnings growth was actually worse than expected, a 6.2% jump in comparable-restaurant sales helped reassure growth investors that Chipotle Mexican Grill still has the high-growth potential to justify a high valuation. Investors also applauded the company's favorable guidance for the fourth quarter, as well as plans to pass on higher food costs to customers by raising menu prices.
For Google, the stock's 14% gain took a backseat to the fact that the search giant's share price finally topped the $1,000 mark. Largely lost in the four-digit hype was Google's third-quarter earnings report, which included very strong comments about the company's success in monetizing its mobile advertising content. Costs per click declined again, continuing a troubling trend that has persisted since late 2011. But so far, growth in total paid clicks has been enough to offset those losses, and Google is doing a better job of driving those clicks from its own internal sites rather than outside networks. If that trend continues, Google should keep seeing mobile growth boost its future results, as well.
SolarCity's 10% jump today continued a string of three straight daily jumps that, together, added almost 28% to its shares since Tuesday's close. Late last week, SolarCity said it had beaten its own projections for third-quarter installation volume, and gave favorable guidance for fourth-quarter and full-year 2014 installations, as well. Since then, momentum has carried the stock higher despite a dilutive offering of stock and debt on Wednesday. Unless SolarCity's full earnings release falls short of its preliminary guidance, the solar company stands to keep reaping the benefits of increased interest in residential solar projects.
