Why United Continental Holdings, Cypress Semiconductor, and Potash Corp. of Saskatchewan Jumped Today

By Markets Fool.com


Image source: United Continental.

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The stock market fell back on Tuesday, with major market benchmarks falling around a quarter percent to give back modest gains from earlier in the week. Sentiment among market participants was mixed, with many traders focusing on efforts by the European tax authorities to ensure that the largest company in the U.S. didn't get unfair favorable treatment from the Irish government. Yet other parts of the market appeared to be on a path to improve, especially among financial stocks.

Moreover, some individual companies reported positive news that sent their shares climbing. Among the best performers were United Continental Holdings (NYSE: UAL), Cypress Semiconductor (NASDAQ: CY), and Potash Corp. of Saskatchewan (NYSE: POT).

United flies higher on personnel change

United Continental climbed 9% after the airline announced it had lured American Airlines executive Scott Kirby to be its president. The move comes in response to concerns about succession planning after the exit of former CEO Jeff Smisek left investors wondering whether United had a deep enough of a support team to sustain positive momentum in the event of a leadership change. The move from United CEO Oscar Munoz received praise from investors and analysts alike, and given that some other United executives have left the airline in the recent past, efforts to ensure it has the talent necessary to keep up with its competitors are extremely important. In combination with an analyst upgrade from Raymond James, United Continental looks poised to keep flying high in a favorable industry environment.

Is Cypress in line for a takeover bid?

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Cypress Semiconductor gained 6% amid rumors that the chipmaker might become a target for a potential buyer seeking to make a strategic acquisition. For a while now, many have speculated that private equity companies such as TPG Capital might be willing to make a bid for Cypress, and shares saw a big bump upward in July as rumors began to circulate more loudly. From a fundamental standpoint, Cypress has labored under impairment charges, restructuring costs, and other one-time items that have kept it from being profitable recently. A private equity buyer might take Wall Street's focus away from short-term results and focus on what could be a brighter long-term future for the company, but the stock won't make much more progress until these rumors start to pan out.

PotashCorp looks to make a big deal

Finally, PotashCorp jumped 11%. The fertilizer maker confirmed it is in discussions with fellow industry peer Agrium (NYSE: AGU) in what could become a potential merger of equals. The company characterized the talks as "preliminary" and emphasized that no decisions have been made definitively about what action to take going forward. However, many investors believe a merger would help consolidate the industry and potentially be a step in the right direction after what has been a tough couple of years for fertilizer producers. Any deal would need to pass antitrust muster, but Agrium also jumped on the day, suggesting investors are enthusiastic about the prospects of a merger.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Cypress Semiconductor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.