After coming within striking distance of its all-time high, the Dow Jones Industrial Average pulled back sharply yesterday, dropping 108 points after the Fed's committee members expressed a willingness to rein in its quantitative easing policies. The economy is still giving off mixed signals -- for example, housing's down sequentially, but up from the year-ago period -- and traders continue to look for the juice the Fed's policies provide.
With three-quarters of all stocks on the New York Stock Exchange falling yesterday, it's notable that the three companies below went in the other direction. But resist the urge to high-five everyone in the cubicles next to you. Smart investors won't celebrate until they know why their stock surged, because without a fundamental basis for the bounce, these stocks could just as quickly make the return trip down.
|Allscripts Healthcare Solutions (NASDAQ:MDRX)||13.8%|
|Threshold Pharmaceuticals (NASDAQ:THLD)||11%|
Prescription for growth The near-14% gain recorded by electronic medical records specialist Allscripts Healthcare Solutions seems like a bit of an anomaly. It reported fourth-quarter adjusted earnings of $0.16 per share compared to $0.25 a year ago, and analysts were anticipating adjusted profits of $0.20. On a GAAP basis it was even worse, swinging to $0.14 in per share loss from earnings of $0.14 per share in 2011, and revenues were down almost 10%. Doesn't seem like much to get excited about.
Yet it also said that bookings were surging, rising to $180.7 million from $161.9 million in the third quarter, which suggests the business may be gaining traction once again.
To say 2012 was a tumultuous one for Allscripts is a bit of an understatement. It ousted its board chairman last April for unspecified reasons, and three board members resigned in protest, along with the CFO who resigned to go somewhere else. Later in the year, the company announced it was considering selling itself, only to decide afterwards that it would be better off as a stand-alone company. Then it fired its CEO. Whew! Left hand, meet the right hand. You'd do well to know what the other one is doing.
So the fact it was gaining business despite an otherwise dismal performance suggests that the business itself isn't broken, but needed new management to guide it forward. Well, it certainly has that, doesn't it? With EMR a key component of President Obama's stimulus package a few years back, there are plenty of opportunities remaining for growth, and it's also possible that Allscripts remains a takeover candidate despite the company's recent decision to the contrary.
Weibo's wobble Sina's fourth-quarter results were incongruous with its price action much the way Allscripts were. Non-GAAP earnings came in at $0.13 per share, down from $0.21 last year, but also under analyst expectations. Revenues of $134 million missed forecasts as well, even though they were up more than 4% from the year-ago period.
What seems to have charged the Chinese online media company's stock, though, is its micro-blogging site, Weibo, which turned in a surprisingly strong performance. The site generated $66 million for all of 2012, 27% of which came from advertising. In the quarter, Weibo added $21.3 million in advertising revenues, or 10% more than it generated in the third quarter.