Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Lululemon Athletica, InterOil, and Acadia Pharmaceuticals Jumped Today

By Dan Caplinger - Mar 30, 2016 at 8:15PM

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

These stocks helped lead the market higher. Find out why.


Image: Lululemon Athletica.

Wednesday was another bullish day for investors, who continued to respond favorably to comments Tuesday from Fed Chair Janet Yellen. The central bank leader countered investor fears of an imminent rate hike from the Fed, suggesting that increases in the Fed Funds rate could come more slowly than expected and countering comments from other Fed officials that had implied the opposite. Markets predictably reacted favorably to the idea of sustained easy monetary policy, and major market benchmarks finished the day with gains of about half a percent. Many stocks did far better, and Lululemon Athletica ( LULU -3.32% ), InterOil (NYSE: IOC), and Acadia Pharmaceuticals ( ACAD -5.77% ) were among the top performers in the market on Wednesday.

Lululemon Athletica jumped 11% after announcing fiscal fourth-quarter results that were better than most investors had expected. The yoga-apparel specialist reported a sales increase of 17%, with total comparable sales rising 11% on a constant-currency basis. Earnings of $0.85 per share were a nickel higher than the consensus forecast, and CEO Laurent Potdevin pointed to the efforts that Lululemon has made over the past couple of years to improve quality and develop a growth strategy for the future. Lululemon's future guidance still has some potential speed bumps, but the retailer's efforts to win back customers it lost in its 2013 yoga-pant debacle appear to be working. Given the healthy state of the athletic apparel industry, Lululemon has a golden opportunity to grow now that it has apparently gotten back its footing.

InterOil also rose 11% in the wake of its report on 2015 results and its latest drilling update. The drilling company is still bringing in minimal revenue as it works to explore its Elk-Antelope gas field in Papua New Guinea, but CEO Michael Hession said that its efforts to build momentum toward its liquefied natural gas project have shown signs of success. Tests at the Antelope-5 site have confirmed substantial reserves, and the Antelope-6 site identified mineral deposits that are commonly associated with natural gas and were connected to the rest of the gas field. These tests led an independent appraise to increase contingent resource estimates to as much as 12.4 trillion cubic feet for Elk-Antelope, and the Raptor and Bobcat discoveries could add another 6 trillion cubic feet as well. InterOil hopes to complete its appraisal program this year, and moving forward with the LNG project could finally get the company close to its long-term aspirations.

Finally, Acadia Pharmaceuticals gained 9%. The biopharmaceutical company got good news this morning, when an advisory panel to the Food and Drug Administration voted 12 to 2 in favor of supporting the company's application for Parkinson's Disease-associated psychosis treatment pimavanserin, also known as Nuplazid. In particular, the FDA panel said that the benefits of the drug outweighed risks. Even with the share-price gains, Acadia's treatment faces further obstacles, as some believe that the FDA might require safety warning disclosures that could lead some medical professionals to be reluctant to prescribe the drug even if it's approved. A final decision is expected by the beginning of May, and the FDA isn't required to follow the advisory panel's recommendations. That additional step could explain why today's gains weren't larger.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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

Lululemon Athletica Inc. Stock Quote
Lululemon Athletica Inc.
LULU
$435.72 (-3.32%) $-14.96
Acadia Pharmaceuticals Stock Quote
Acadia Pharmaceuticals
ACAD
$18.79 (-5.77%) $-1.15

*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
624%
 
S&P 500 Returns
140%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/05/2021.

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

Our Most Popular Articles

Premium Investing Services

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