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 finished modestly higher again today, with investors largely focusing on earnings-related news while they wait for further signs of the economy's health. Despite the broader market's restraint, though, SolarCity (NASDAQ:SCTY.DL), Intrepid Potash (NYSE:IPI), and GrafTech International (UNKNOWN:GTI.DL) all posted double-digit percentage gains on encouraging news. Let's take a closer look to find out what sent those stocks soaring today.
SolarCity climbed 11% as the residential-solar specialist revealed plans to issue bonds backed by the expected stream of lease payments from customers who've agreed to have solar panels installed at their homes. Not only will the securitization help SolarCity get more funds to grow its business by extending more credit to new customers, but it also legitimizes the leasing business model. Given the success that SunPower (NASDAQ:SPWR) had with a rival deal a few years ago for solar-project bonds, SolarCity's achievement marks just the latest step in its ambitious growth trajectory.
Intrepid Potash also posted a nearly 11% gain, with the jump coming late in the afternoon on news that an institutional investor had substantially increased its stake in the potash producer. Privately held Koch Industries now owns almost 7% of the company's shares, expressing confidence that the recent plunge in potash-related stocks due to the breakup of a key Russian potash cartel is overblown. The disclosure was made as of September 30, and it will be interesting to see if more institutions follow suit as they make similar reports in the next two weeks.
GrafTech rose 16%, following up on similar gains late last week after the company's earnings report. Although gross profits fell by nearly half on a 5% drop in revenue, investors have instead focused their hopes on GrafTech's industrial metals business. The segment has lost 90% of its operating earnings in a poor environment for the entire industry, but cost-cutting efforts could help the business contribute more to GrafTech's overall earnings. Even as investors appear to jump on the turnaround bandwagon, it's important to remember the risks involved with buying too early in the process of a corporate recovery.