Not many investors were actively trading on Thursday, as the Memorial Day weekend approaches and folks prepare to hit the beach and forget about stocks for a while. The stock market edged modestly higher today on what one trader called “atrocious” volume.
Yesterday the Federal Reserve signaled that an interest rate hike wasn’t likely to come in June, and today a widely used measure of jobless claims hit a 15-year low, so the economy seems to be doing just fine. The benchmark S&P 500 finished 0.2% higher, while the Nasdaq Composite was up 0.4% and the Dow Jones Industrial Average was flat.
But while much of the market went sideways, investors in Shake Shack Inc (NYSE:SHAK), Transocean LTD (NYSE:RIG) and Salesforce.com, Inc. (NYSE:CRM) were each amply rewarded, and each stock finished as one of the best performers in the stock market today.
Shake Shack Inc (SHAK)
Shake Shack, which has been the darling of Wall Street of late, continued its remarkable run on Thursday, and SHAK stock soared 8.5% on news that the burger joint had filed for a trademark on the term “Chicken Shack.” While I don’t particularly find the phrase too catchy, the market loved it.
Investors seemed to think the trademark hinted at a new product, perhaps a chicken sandwich, that could compete against the likes of Chick-Fil-A and KFC, the latter which is owned by Yum! Brands, Inc. (NYSE:YUM). SHAK stock hit all-time highs today and is now up more than 95% from its close on the day of its IPO in late January.
Personally, I’m not a fan of the burger chain’s stock, which I find to be incredibly overvalued. SHAK stock fell more than 7% after a disappointing earnings report in March, highlighting valuation concerns.
Transocean LTD (RIG)
Offshore contract oil driller Transocean saw its shares jump 4.3% on Thursday as crude oil prices surged 2.8%. A barrel of oil now goes for just over $60 — still a long cry from its 52-week high of nearly $100.
RIG stock is well off its 52-week highs, too — about 57% off those highs, to be exact. RIG shares have a high beta of 1.89, which means that for every 100% move in the stock market as a whole, RIG tends to move 189%. Transocean, as you might imagine, is especially sensitive to oil prices, so it’s not unusual for the stock to fall more than the price of crude when oil is down and rise more than crude when oil goes up.
In what is further good news for the company, both Transocean and Halliburton Company (NYSE:HAL) reached terms with BP plc (ADR) (NYSE:BP) to settle up on the 2010 Deepwater Horizon oil spill, putting the environmental and humanitarian disaster behind it.
Salesforce.com, Inc. (CRM)
Finally, shares of Salesforce.com surged on Thursday, jumping nearly 4% after an upbeat earnings report. The announcement was more good news for the enterprise-focused cloud computing company, who is also reportedly exploring the possibility of a sale.
“CRM revenues grew 22% year-over-year, coming in just ahead of Wall Street estimates at $1.51 billion versus expectations for $1.5 billion. Non-GAAP earnings of 16 cents per share also topped consensus estimates by 2 cents.
On a GAAP basis, the cloud computing sales management company swung to a surprise profit of $4 million — a net reversal of $101 million from the prior quarter’s $97 million loss.”
But that’s not all:
“Not content to merely squash earnings and revenue estimates, CRM stock is also enjoying a boost from management’s brighter full-year fiscal 2016 revenue projections, which Salesforce boosted on Wednesday from a range of $6.475 billion to $6.52 billion, to a range of $6.52 billion to $6.55 billion.”
CRM stock finished at $72.91 today.
As of this writing John Divine was long Jan 2016 $27 RIG calls. You can follow him on Twitter at @divinebizkid or email him at firstname.lastname@example.org.
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