Thursday was a mixed day for the stock market, with the Dow climbing further into record territory, but the S&P 500 and Nasdaq Composite giving back a small portion of their recent gains. Earnings season has taken hold of investors' attention, and no clear trend emerged from the hodgepodge of different results from companies in various sectors throughout the economy.
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Nevertheless, some stocks had especially good news, and among the best performers on the day were Southwest Airlines (NYSE: LUV), MoneyGram International (NASDAQ: MGI), and United Rentals (NYSE: URI). Below, we'll look more closely at these stocks to tell you why they did so well.
Image source: Southwest Airlines.
Southwest flies higher
Southwest Airlines soared 9% after reporting record earnings for 2016 in its fourth-quarter financial report. Quarterly net income actually fell 3%, but a larger drop in outstanding share count sent earnings per share slightly higher, and revenue climbed 2% from the year-ago quarter. More importantly, though, after a long period of tough industry conditions, CEO Gary Kelly noted that Southwest's outlook is improving.
In particular, the airline has been better able to sustain pricing by reducing the extent to which it increases capacity, setting the stage for a more favorable supply-and-demand relationship. Moreover, Kelly believes that corporate tax reforms and reduced regulation under the Trump administration could bolster business further, creating even better growth prospects for Southwest ahead.
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MoneyGram gets a buyout offer
MoneyGram International gained 9% in the wake of receiving an acquisition offer from Chinese payment company Ant Financial. Under the terms of the deal, Ant will pay $880 million for MoneyGram, which works out to $13.25 per share in cash. For Ant Financial, which is related to Chinese internet giant Alibaba, the deal allows it to expand the level of service it can provide to its already extensive client base throughout the Asia-Pacific region.
MoneyGram, meanwhile, will get access to a larger customer base, making its service more valuable. MoneyGram CEO Alex Holmes noted that the deal will "benefit consumers throughout the world who depend on innovative and reliable financial connections to friends and family," and he called Ant Financial "an ideal partner for MoneyGram" in allowing it to expand its business going forward.
United Rentals reports strong results, makes a purchase
Finally, United Rentals jumped 11%. The equipment-rental specialist released its fourth-quarter earnings report late Wednesday, posting flat revenue and a 22% rise in adjusted earnings per share compared to the year-ago period. CEO Michael Kneeland said that demand was strong despite facing pressure in maintaining rental rates, and he expects 2017 to offer new growth opportunities.
In particular, United Rentals announced the acquisition of industry peer NES Rentals for $965 million in an all-cash deal, with the goal of expanding the company's footprint on the East Coast, as well as in the states along the Gulf of Mexico and the Midwest. With strong prospects for organic and acquisition-led growth, United Rentals has investors excited about its rental business looking ahead.
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