Why Puma Biotechnology, Applied Optoelectronics, and Ferroglobe Jumped Today

By Dan Caplinger Markets Fool.com

Monday was a good start to the week for stocks, with major benchmarks climbing around half a percent on the day. Most market participants pointed to a lack of bad news over the weekend and anticipation about expected favorable economic data in the coming days as drivers of the generally positive attitude among investors.

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But there are still plenty of factors that are preventing stocks overall from mounting stronger gains, including nervousness about geopolitical issues as well as weaker parts of the global economy. Nevertheless, some stocks posted strong gains, and Puma Biotechnology (NASDAQ: PBYI), Applied Optoelectronics (NASDAQ: AAOI), and Ferroglobe (NASDAQ: GSM) 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.

Image source: Getty Images.

Puma leaps as investors hope for FDA approval

Shares of Puma Biotechnology soared 39% as investors anticipated that the biotech company will get approval of its neratinib breast cancer drug from the U.S. Food and Drug Administration. An FDA advisory committee is scheduled to meet later this week, and documents supporting that meeting were released today. In those documents, investors found fewer critical views of neratinib than some had expected, and that led those following the stock to conclude that the drug is likely to get a favorable review from the advisory panel. That by itself won't mean certain approval for neratinib, as the final decision from the FDA doesn't necessarily hinge on the advisory panel. Nevertheless, positive signs have investors excited about Puma, and there's potential for further gains if the FDA does indeed follow through with approval later this year.

Fiber-optic strength lifts Applied Optoelectronics

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Applied Optoelectronics stock climbed 12% after the supplier of fiber-optic components got a favorable review from Wall Street analysts. Needham & Co. began its coverage of Applied Optoelectronics stock with a strong buy rating, arguing that the company has a lot of growth potential stemming from moves among enterprise data center users to upgrade their performance and incorporate faster transfer speeds. Needham set an $85-per-share price target on the stock, which still gives investors nearly 20% upside from current levels. If Applied Optoelectronics can turn the new upgrade cycle into accelerating growth, then investors could see even greater gains in the long run.

Ferroglobe gains ground

Finally, shares of Ferroglobe rose 9%. The producer of silicon metal and various related alloys released its first-quarter financial results, which included flat revenue compared to the fourth quarter of 2016 and a minimal net loss for the quarter. Shipment volumes were down from year-ago levels, but a rise in prices for manganese alloys was sufficient to keep total average selling prices relatively steady. Yet CEO Pedro Larrea was optimistic about the company's performance, noting that "significant margin improvement reflects solid demand across end markets and a continued improvement in the overall pricing environment." Even with the gains, Ferroglobe shares have lost half their value in the past two years, but investors are optimistic that the company can earn back some of those losses over time.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.