Why Diamond Foods, Puma Biotechnology, and Vaalco Energy 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 once, the stock market did what any ordinary person would expect it to do: It rose after getting good news on the economy front. November's employment report showed better-than-expected gains in job creation and a plunge in the unemployment rate to 7%, and rather than run scared in fear that the Federal Reserve would turn off the stimulus taps sooner rather than later, investors celebrated by sending stocks up by more than 1%. A few stocks posted even more impressive gains, with Diamond Foods , Puma Biotechnology , and Vaalco Energy among the top performers on the day.
Diamond Foods climbed 7% as the nut and snack food producer managed to post a slightly better adjusted profit than expected in last night's earnings report. Investors ignored a 9% drop in revenue that was worse than they had hoped to see, although shares initially fell in after-hours trading yesterday. Some believe that the move might reflect potential takeover interest, as Diamond still has an impressive command of the nut segment even after its many challenges in recent years.
Puma Biotechnology rose another 12% after an even more impressive 68% gain yesterday. Today's action looked like follow-through buying as more investors considered the ramifications of Puma's favorable study data from its neratinib breast cancer drug. As Fool contributor Sean Williams observed yesterday, neratinib's results suggested that it could beat out not only current standard treatment regimens but also rival drug Herceptin from Roche's Genentech division. Despite neratinib's promise, an 88% rise in just two days for a developmental-stage company with no revenue involves a major leap of faith among investors.
Vaalco Energy gained 9% after Angolan authorities cleared the oil and gas exploration company and partner Sonangol to start drilling off the African nation's coast. Discoveries in the vicinity have investors excited about the prospects for Vaalco's offshore block, and with government approval in hand, Vaalco can now proceed to find oil services companies to help it begin offshore operations. Unlike many of the large players in Angola, Vaalco is relatively small, with just $165 million in revenue over the past 12 months. As a result, a solid find in the area could have a huge impact on Vaalco's future prospects.
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The article Why Diamond Foods, Puma Biotechnology, and Vaalco Energy 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 no position in any of the stocks mentioned. 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.
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