Today's 3 Best Stocks

Anticipation of tomorrow's Federal Reserve open market meeting is building, and the indication from investors thus far, following a second straight day of big gains in the broad-based S&P 500 , is that they expect the Fed's accommodative monetary policies to continue with no end to QE3 in sight. If anything, I would certainly expect quite a volatile day tomorrow in lieu of the big run-up we've witnessed going into the announcement.

Also helping the S&P 500 move higher was additional good news from the housing sector. Following yesterday's NAHB Housing Market Index, which hit a seven-year high, we received data that showed a 6.8% increase in housing starts today to an annually adjusted rate of 914,000. Although this figure is still well off the highs we witnessed in terms of housing starts pre-recession, this is still a very strong level of growth that would signal sustained housing sector expansion.

By the end of the day, the S&P 500 had advanced 12.77 points (0.78%) to close at 1,651.81. Investors are clearly excited about tomorrow's Fed meeting, but the excitement in the following three stocks was simply unmatched.

Leading the pack was FLIR Systems , a designer of thermal imaging and infrared camera systems for the government and business sector. Shares jumped an impressive 6.2% after receiving an upgrade from Raymond James analyst Brian Gesuale to strong buy from "market perform." Gesuale also set a price target of $33 on the FLIR, implying potential upside of 32%. Gesuale specifically noted that he anticipates the company's automotive business this year, and detectors next year, should be the primary growth driver since its government business accounts for such a small percentage of revenue. Personally, I'm a bit indifferent about FLIR at these levels and would prefer to wait on the sidelines until after FLIR next reports earnings.

Shares of iron ore and metallurgical coal miner Cliffs Natural Resources added 5.1% on the day after research firm Zacks reported the company extended an iron ore pellet sale and purchase agreement with Essar Steel Algoma until 2024. Iron ore prices have been weak and volatile in recent weeks making any semblance of certainty a good thing for Cliffs Natural shareholders. Despite the company slashing its dividend by 76%, I feel quite strongly that iron ore prices will find a bottom shortly due to rising demand in overseas markets, which should help propel Cliffs higher.

Last but certainly not least, Regeneron Pharmaceuticals tacked on 4.3% despite no company-specific news. The impetus behind Regeneron's incredible run higher has been the rapidly growing sales of Eylea, its wet age-related macular degeneration drug, which is quickly gaining new indications. Regeneron's lead drug is locked up under patent protection at least until the beginning of next decade, which makes it a particularly intriguing buyout candidate. It'd certainly be hard to bet against Regeneron now from a short seller's standpoint.

Can this company iron out its problems?
Cliffs Natural Resources has grown from a domestic iron ore producer into an international player in both the iron ore and metallurgical coal markets. It has also underwhelmed investors lately, especially after its dramatic 76% dividend cut in February. However, it could now be looked at as a possible value play due to several factors that are likely to remain advantageous for Cliffs' management. For details on these advantages and more, click here now to check out The Motley Fool's premium research report on the company.

The article Today's 3 Best Stocks originally appeared on Fool.com.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.