Please ensure Javascript is enabled for purposes of website accessibility

Why Furiex Pharmaceuticals, Lionbridge Technologies, and ATMI Are Today's 3 Best Stocks

By Sean Williams - Feb 4, 2014 at 5:15PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P 500 stages a modest rebound, Furiex Pharmaceuticals more than doubles, and Lionbridge Technology and ATMI respectively surge by 29% and 25%.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

It was another day of generally poor economic data, but following yesterday's tumultuous drop in the S&P 500 (^GSPC -0.58%) investors were willing to give the market a temporary reprieve.

Attempting to push the market lower was the release of December's factory order numbers which showed a decline of 1.5%, compared to November's expansion of 1.5%, due to a decline in aircraft orders. The good news, and the reason the market might be up today, was that excluding the weak transportation category new orders were actually up 0.2%.

Also helping push the S&P 500 higher today were a number of solid earnings reports, with upside surprises practically doubling downside surprises after the bell on Monday. Pessimists have honed in recently on weaker than expected top-line growth, so we'll certainly need to see an extension of these results throughout the remainder of earnings season if the S&P 500 is to continue heading higher.

By day's end, the S&P 500 had advanced by 13.31 points (0.76%) to close at 1,755.20, breaking a hefty two-day losing streak and bouncing nicely off its three-plus month lows.

Furiously leading the charge to the upside today was biopharmaceutical company Furiex Pharmaceuticals (NASDAQ: FURX), which ended higher by a "mere" 129.9% after rocketing higher by as much as 165% following the release of positive top-line data from two late-stage studies of its diarrhea-predominant irritable bowel syndrome drug, eluxadoline. According to Furiex, eluxadoline met its primary endpoint of simultaneously improving patients' stool while reducing abdominal pain. Although Furiex's 75 milligram dose failed to meet statistical significance, its 100 mg dose handily outperformed the placebo in trials. Furiex plans to file a new drug application for eluxadoline in the second quarter. While optimism is certainly warranted, I'd caution that the Food and Drug Administration's view of eluxadoline and a potential launch of the drug would have to be flawless for Furiex to maintain its current valuation.

Language, content, and testing software solutions provider Lionbridge Technologies (NASDAQ: LIOX) tacked on 29.4% after it reported better than expected fourth-quarter results. For the quarter, Lionbridge's revenue rose 12% to a record $127.5 million, as generally accepted accounting principles earnings per share improved to $0.10. By comparison, Wall Street expected just $0.05 in EPS on $121.7 million in revenue. Looking ahead, Lionbridge anticipates full-year revenue growth of 5% to 10%, perfectly bracketing the 7% that Wall Street has projected. Similar to Furiex, investors have every reason to be excited after today's news, but the stock move might be excessive given that Lionbridge is now valued at 25 times forward earnings and growing at between just 5% and 10%.

Finally, semiconductor materials company ATMI (NASDAQ: ATMI) popped 25.5% after announcing that it had agreed to a $1.15 billion buyout by rival Entegris (ENTG 0.21%). The deal itself values ATMI at $34 per share and will be funded in its entirety by cash. The reasoning behind the deal for Entegris is to reduce costs and leverage the combined entity to go after larger deals. The deal, though, shouldn't come as a huge surprise, as ATMI had hired Barclays to explore possible strategic alternatives for the company in November.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$3,900.79 (-0.58%) $-22.89
Entegris, Inc. Stock Quote
Entegris, Inc.
$105.52 (0.21%) $0.22

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.