Please ensure Javascript is enabled for purposes of website accessibility

Why Michael Kors, Yum! Brands, and Headwaters Soared Today

By Dan Caplinger – Feb 4, 2014 at 7:01PM

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

Stocks regained a modest portion of its losses from yesterday. But several stocks saw very strong gains, with Michael Kors rising 17%, Yum! Brands picking up 9%, and Headwaters jumping 20%. Find out more about what made these stocks soar.

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.

The stock market gave bullish investors some relief today, as many market analysts suggested that value-hungry investors decided to take advantage of the 325-point drop in the Dow yesterday to pick up stocks at a bargain price. Yet even though the rise of 0.5% to 0.75% for the Dow and S&P 500 didn't make up all of the market's lost ground, certain stocks did much better, with Michael Kors (CPRI 2.72%), Yum! Brands (YUM 2.08%), and Headwaters (HW) among the best performers of the day.

Michael Kors (KORS) spiked upward by 17% after the company announced strong results for the holiday quarter. The luxury retailer enjoyed comparable-store sales gains of 28%, beating its own guidance and leading to a 59% jump in total revenue. Margins were also strong, helping support a 77% rise in net income. As solid as 24% same-store sales growth in North America was, European comps of 73% wowed investors, and greater revenue from licensing shows that the luxury retailer appears to be running on all cylinders.

Yum! Brands (YUM) gained 9% after reporting earnings last night, with the fast-food giant seeing its net profit rising 4% in a big surprise to most investors. The key to the positive figures came from China, where total sales were up 3%. Things weren't perfect for Yum!, as the China division's same-store sales dropped by 4%. Yet in comparison to much worse results that the company has seen throughout the past several quarters, the quarter's figures led many investors to believe that a serious turnaround is just beginning for Yum! in China.

Headwaters soared by 20% as the building-materials specialist defied expectations for a quarterly loss in its most recent report, instead posting a modest profit and seeing quarterly revenue rise almost 11% from year-ago levels. In particular, Headwaters' building-product business saw sharp gains of 21% in sales, and that led the company to boost its projections for pre-tax earnings before interest and non-cash adjustments by about $5 million for fiscal 2014. As long as a strong U.S. economy keeps the industry moving in the right direction, Headwaters (HW) appears ready to keep taking advantage.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Michael Kors Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Nearly 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

Capri Holdings Stock Quote
Capri Holdings
CPRI
$57.35 (2.72%) $1.52
Yum! Brands Stock Quote
Yum! Brands
YUM
$128.66 (2.08%) $2.62
Headwaters Incorporated Stock Quote
Headwaters Incorporated
HW

*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 analyst team.

Stock Advisor Returns
349%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/30/2022.

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.