Today's economic data certainly didn't befit a move higher in the broad-based S&P 500 (^GSPC 1.20%), but following yesterday's romp higher to a record close, it didn't seem that anything was going to stop it from cresting 1,900 (at least intraday!).
The big news was April's retail sales figure, which increased fractionally, just 0.1%, as big-ticket items like furniture and appliances weakened, and restaurants witnessed sales retrace. We should, of course, put into context that this 0.1% gain comes on the heels of March's 1.5% surge in retail sales, the single-largest monthly gain in four years, so some "deflating of the balloon" was expected in April. This figure is especially important for U.S. GDP because consumer spending accounts for roughly 70% of GDP. While growth was subtle, it still signals progress in the U.S. economy, and the fact that the retraction we witnessed in first-quarter GDP figures was likely due to the weather and not some other endemic slowdown.
By day's end, the S&P 500 managed to claw its way to another record close, pushing higher by 0.80 points (0.04%), and ending at 1,897.45. Despite the minimal move to the upside, three stocks managed to surge higher and pull investors along for the ride.
Source: Giorgio Monteforti, Flickr.
Leading the pack and galloping 21.6% higher was small-cap gold and silver miner Gold Resource (GORO 9.63%), which reported its first-quarter results last night. According to its report, Gold Resources sold 20,600 gold-equivalent ounces at a total cash cost of $422/oz., which was an 18% decrease from the year-ago quarter and a 38% decline from the sequential fourth quarter. Total net income fell ever so slightly, to $7.1 million, or $0.13 per adjusted share from $7.4 million in the prior-year period. Compared to Wall Street's lone estimate, which was for a $0.05 per-share profit, Gold Resource crushed it! Furthermore, Gold Resource increased its cash and cash equivalents by $4.5 million over the prior quarter, and stuck to its previous production forecast. Although gold prices have been largely uncooperative, with a favorable cost structure and improving cash flow potential, I'd suggest it might finally be time to give Gold Resources a look.
Shareholders of specialty coffee company Keurig Green Mountain (GMCR.DL) also received a caffeinated jolt today with its shares rising 7.6% after Coca-Cola (KO 0.15%) announced in a regulatory filing that it was increasing its stake in Keurig Green Mountain to 16%. Keep in mind this comes after Coca-Cola announced in February that it'd be taking a 10% stake in Keurig Green Mountain for $1.25 billion.
Source: Keurig Green Mountain.
The idea here is that Keurig's cold beverage machine gives Coke products another way of infiltrating American households, while also giving Keurig the brand-name power of Coca-Cola to help introduce its product to foreign markets. Invariably, with such a large stake being built up, investors also have to be thinking about the potential for a long-term buyout. We know consumers love their coffee almost universally around the globe, and with Keurig's unique position in the single-serve brewing market, I continue to believe there could be more upside in its shares, even with shares valued where they are.
Finally, biopharmaceutical company Halozyme Therapeutics (HALO 0.67%) jumped 6.9% after reporting its first-quarter results. The figures themselves weren't all too exciting, with Halozyme's revenue ticking up slightly to $12 million from $11.8 million, and the company reporting a wider loss of $0.22 per share. Wall Street, for instance, was expecting a narrower loss of just $0.14 per share. What got investors excited, however, was CEO Helen Torley's commentary that its pancreatic cancer therapy PEGPH20, which it voluntarily halted the study of in April so the data monitoring committee could look into the potential for thromboembolic events, was now off hold, and the DMC had agreed to let it continue with its phase 2a study. It's been my opinion that PEGPH20 shouldn't have factored much into Halozyme's share price back in April, anyway, so its drop then seemed a bit unwarranted. With this trial resuming, and MabThera SC approved in the EU as of March, it's looking like Halozyme could turn the corner to profitability within the next year or two. It's a biotech name worth keeping your eyes on.
