Why Transocean, Outfront Media, and PDL BioPharma Jumped Today
The new week began on a poor note for the stock market, as major benchmarks were broadly lower on the day. The Nasdaq Composite got hit the hardest, as big technology names took the brunt of the selling pressure on Wall Street, but broader concerns about geopolitical issues surrounding North Korea and the surprisingly strong showing by right-wing groups in the German elections also weighed on sentiment. Still, some companies had good news that sent their share prices higher. Transocean (NYSE: RIG), Outfront Media (NYSE: OUT), and PDL BioPharma (NASDAQ: PDLI) were among the best performers on the day. Below, we'll look more closely at these stocks to tell you why they did so well.
Oil's gains lift Transocean
Shares of Transocean rose almost 8% on a good day for the energy markets. Crude oil prices climbed by more than $1.50 per barrel, rising above $52 and approaching their best levels in almost four months. Transocean was also the beneficiary of positive comments from analysts at UBS, who upgraded the stock and several of its industry peers from neutral to buy because of expectations for rising demand and steadily increasing oil prices. The offshore drilling specialist still faces plenty of challenges, and past moves higher in oil have reversed course and sent shares lower. Even with crude's rebound, prices remain well below where they were several years ago, and that could hold Transocean back.
Outfront sees the signs
Outfront Media stock climbed more than 15% after the advertising company said that it had received a recommendation for a major contract. The company, which helps with billboards and mass-transit-based advertising, said that it had been recommended for the award of a contract with New York's transportation authority. The news comes as a welcome relief for shareholders, who had worried that the MTA might choose another provider for subway, train, and bus licenses for advertising. Outfront had receive short-term extensions recently, but a new 10-year deal would obviously clear up a lot of uncertainty regarding the future of the business.
PDL gives shareholders a vote of confidence
Finally, shares of PDL BioPharma gained 6%. The biotech intellectual property specialist told investors that it intends to spend as much as $25 million buying back its stock on the open market. The move is the second of the year for the company, and CEO John McLaughlin said that it "underscores the confidence we have in our financial performance, business strategy, and our prospects over the next 12 months and beyond." With a market capitalization of just over $500 million, a commitment to repurchase nearly 5% of its outstanding shares is a big deal and one that shareholders seem to appreciate today. If the company can follow that up with solid business gains, the buybacks could turn out to be well-timed as well.
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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.