Why Roundy's, Herbalife, and Gogo Soared Today
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.
For the third session in a row, the stock market gave up ground, with investors choosing to focus on the potentially negative risks in a market environment that has moved nearly straight up for months. Even though the Dow and S&P posted losses of 0.6% and 0.3% respectively, several individual stocks produced sizable gains on the day. Let's find out how Roundy's , Herbalife , and Gogo all managed to jump higher on a down day for the broader market.
Roundy's gained 7% in response to the grocer's announcement last night that it would buy 11 Dominick's stores in the Chicago area from Safeway for $36 million in cash and assumed leases. The move helps nearly double the company's exposure to the area, with plans to change the stores' names to bear the Mariano's brand and adding to Roundy's 13 existing Mariano's locations. Roundy's will fast-track the acquisition, trying to get it done before the end of the year. Although the company will suspend its dividend to finance the move, shareholders applauded the growth implications from the acquisition, as Roundy's anticipates eventually having as many as 45 to 50 Mariano's stores in metropolitan Chicago.
Herbalife also climbed 7% as an appeals court in Belgium overturned a lower-court ruling that the nutrition-products retailer was operating a pyramid scheme. Herbalife responded with a press release concerning the decision, noting its intent to continue working with its independent distributors in Belgium and throughout the world. Clearly, Belgian law doesn't govern whether U.S. regulators will make the same decision, but investors nevertheless are pleased to see support for the bullish case on Herbalife.
Gogo jumped almost 10%, following up on big gains yesterday after the in-flight Internet provider said it would start testing international wireless service onboard 747-400 aircraft in hopes of rolling out the service to customers early next year. With the FAA having given Gogo a supplemental-type certificate to install its technology on aircraft, the company hopes that revenue will soar ever higher as travelers become more reliant on staying connected while in flight.
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The article Why Roundy's, Herbalife, and Gogo Soared Today originally appeared on Fool.com.Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool has options on Herbalife. Try any of our Foolish newsletter services free for 30 days. 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.