With Christmas drawing nigh, the Commerce Department dispatched Santa Claus over to Wall Street today, with news that the department had upwardly revised their previous third quarter 3.9% GDP growth rate to 5%, the fastest growth pace since the third quarter of 2003. New factors contributing to the revision were stronger consumer and business spending.
The Dow Jones Industrial Average, already enjoying four consecutive up days, continued higher, and closed over 18,000 for the first time ever. It ended the day up 0.36%, while the S&P 500 only managed a 0.17% climb. Meanwhile, the Nasdaq played Scrooge, closing down 0.33%.
The good cheer on Wall Street led to about two-thirds of the issues advancing, among them, Avis Budget Group Inc. (CAR), Chesapeake Energy Corporation (CHK), and Vanda Pharmaceuticals Inc. (VNDA) to finish as three of Today’s Best Stocks.
Avis Budget Group Inc. (CAR)
CAR stock soared almost 6% today amid news that Larry Robbins, founder of hedge fund Glenview Capital Management was taking a 5.12% stake in Avis Budget Group. Glenview disclosed that it now owns roughly 5.4 million shares of CAR stock. Also helping boost CAR stock today was the announcement by rental car rival Hertz Global Holdings, Inc. (HTZ), that it is raising its rental car prices. CAR stock has been driving north since October, and is up almost 40%.
Chesapeake Energy Corporation (CHK)
A $1 billon share buyback, just hours after also announcing a $5 billion natural gas asset sale after Monday’s closing bell, rocketed CHK shares more than 10% higher today. Chesapeake has just sold almost 413,000 net acres of land that is intended for shale exploration in their Marcellus and Utica shale fields to Southwestern Energy Company (SWN). The sale includes some 1500 wells that have been producing the equivalent of 57,000 barrels of oil per day.
The share repurchases will allow CHK to pay down debt, as well as return capital to investors. CHK has recently been cutting costs and scaling back investments, trying to restore confidence in the company. In recent months, CHK stock had fallen from $27 per share to $17, before bouncing back to current closing price of $20.29.
Vanda Pharmaceuticals Inc. (VNDA)
VNDA stock was the 6th biggest winner on Wall Street today after settling a lawsuit with partner, Novartis AG (ADR) (NVS), to regain full rights to its Fanapt drug, used in the treatment of Schizophrenia. After Monday’s closing bell, Vanda said Novartis had agreed to transfer all U.S. and Canadian rights for Fanapt, and invest $25 million in Vanda. The deal could bring another $70 million in annual sales to VNDA.
Both companies enacted a licensing deal for Fanapt over four years ago, but have squabbled this past year with law suits and counter law suits against each other. With this settlement, the company is now expected to become profitable by 2017. VNDA stock, which was up 14% today on strong volume of 5.7 million shares, has soared more than 65% since mid-October.
As of this writing, Ethan Roberts did not hold any positions in the aforementioned securities.
