Why Sanchez Energy, DexCom, and Pandora Media Jumped Today

By Dan Caplinger Markets Fool.com

The stock market finished the week on a mixed note on Friday, as the Nasdaq and S&P 500 climbed higher, even as the Dow Jones Industrials (DJINDICES: ^DJI) finished with a slight loss of just five points. Earnings season has begun, and solid results from major U.S. banks set a generally positive tone for the market.

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Investors responded favorably to optimistic guidance about the financial industry's prospects for 2017, and some other companies also had extremely good news that helped to offset some weakness in the consumer segment of the economy. Three of the top-performing stocks on the day were Sanchez Energy (NYSE: SN), DexCom (NASDAQ: DXCM), and Pandora Media (NYSE: P). Below, we'll look more closely at these stocks to tell you why they did so well.


Image source: Sanchez Energy.

Sanchez boosts its big bet on the Eagle Ford

Sanchez Energy soared 29% after the energy company reported that it had entered into a strategic partnership with private equity giant Blackstone Energy Partners. The 50/50 venture was formed to purchase a working interest in about 318,000 acres in the lucrative Eagle Ford area of Texas from peer Anadarko Petroleum (NYSE: APC), with the partnership paying $2.3 billion for the assets. The Anadarko property is next to assets that Sanchez already works on in the Eagle Ford, and current production will provide immediate cash flow while extensive proved reserves and resource potential show plenty of future promise.

CEO Tony Sanchez III noted that, "this accretive and transformative acquisition more than doubles our drilling inventory," and it will triple its exposure to the favorable trends in sections of the Eagle Ford that Sanchez has already successfully developed. Investors are excited that Sanchez was able to make a smart strategic partnership to capitalize on what could be a strong opportunity.

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DexCom gets a key regulatory win

DexCom jumped 26% in the wake of a favorable classification decision from the Centers for Medicare and Medicaid Services (CMS) last Thursday. The producer of continuous glucose monitors said that the CMS had assigned the DexCom G5 Mobile system as a therapeutic continuous glucose monitor, which allows medical professionals to make treatment decisions using the device.

Currently, the company's system is the only one that has earned this classification, and DexCom CEO Kevin Sayer described how big a breakthrough this is for the company, saying, "This landmark CMS ruling will make available the most important technology in diabetes management to the Medicare population." Investors expect the move to have dramatic impacts on DexCom's financials going forward, justifying the big share-price gain.

Pandora cuts jobs, but gives favorable guidance

Finally, Pandora Media picked up 6%. The streaming audio company said that it would cut its workforce in the U.S. by about 7% in response to increasing competition in the music-streaming niche, with the goal of cutting operational costs. However, Pandora also said that it expects to top its previous guidance for revenue for the fourth quarter, citing strong advertising performance and an increase in paid subscription customer counts.

CEO Tim Westergren put the gains into context, saying that, "with all the elements of our strategy in place, we are in the best position possible to expand our listener base, drive engagement, and deliver significant value to all of our stakeholders." Whether the gains will continue depends on whether the introduction of Pandora Premium goes as well as Westergren and Pandora hope, but for now, investors seem optimistic about Pandora's future.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Pandora Media. The Motley Fool has a disclosure policy.