It was generally a great quarter for U.S. indexes all the way around, with the Dow Jones Industrial Average (INDEXDJX:.DJI) and S&P 500 (INDEXSP:.INX) all rising to the occasion and eclipsing their all-time highs. The same can’t quite be said for the tech-heavy Nasdaq-100 (INDEXNASDAQ:NDX), which rose just 5.9% during the quarter. Don’t get me wrong — this is still an impressive gain. However, the continued commoditization of technology products dragged down results for numerous technology bellwethers.
Despite underperforming both the Dow Jones and S&P 500, three companies shone to the upside during the quarter.
Micron Technology, Inc. (NASDAQ:MU) +57.3%
Memory-chip maker Micron sneaked in as the fifth-best performer in the S&P 500, but it snagged the title as top dog within the Nasdaq-100 thanks to the beautiful combination of decreasing production costs and rising gross margins. Micron’s second-quarter results highlighted this outperformance, as its revenue flew by Wall Street’s estimates by $160 million despite a worse-than-expected loss of $0.28 per share.
Celgene Corporation (NASDAQ:CELG) +47.7%
Biotechnology company Celgene delivered an exceptional quarter for investors, rising nearly 48% after outlining a plan in early January at the J.P. Morgan Healthcare Conference that could have it doubling its revenue and tripling its profits organically by 2017. Celgene has multiple growth drivers in Revlimed for multiple myeloma and Abraxane, which continues to gain additional approvals in various cancer treatments. In addition, Celgene received FDA approval for its advanced multiple myeloma drug Pomalyst during the first quarter.
Dell, Inc. (NASDAQ:DELL) +42.2%
PC-maker Dell’s gains come courtesy of a buyout offer to go private from CEO Michael Dell and Silver Lake Partners, which offered $13.65 per share for the company in February. After weeks of huffing and puffing from activist investors unhappy with the buyout price, The Blackstone Group L.P. (NYSE:BX) and Icahn Enterprises LP (NASDAQ:IEP) one week ago offered competing bids that could take all, or parts, of the company private for a value ranging from at least $14.25 for Blackstone, to as high as $15 for Icahn Enterprises bid. As a shareholder in Dell, I encourage you to read my more detailed analysis of the three-way battle for this transformative company, and why the Blackstone offer is a superior bid.
Which company has the best shot of outperforming in Q2?
I’m a current shareholder in Dell, but I’m also a realist who understands that the chance that any competing bids will send shares higher is pretty low. With its PC business in decline and its networking business showing double-digit gains, cash flow growth from here on out should remain a wash. That will make raising additional cash beyond the current offers difficult, which leads me to believe Dell will be fairly flat in the upcoming quarter.
