Market Insights

Unusual companies advanced following their quarterly results in the last week, continuing a trend this earnings season.

Consider Garmin (GRMN) and Arista Networks (ANET), the two biggest gainers in the S&P 500 since our last review. GRMN, a one-time leader in GPS systems, has been reinventing itself as a maker of smart watches and fitness devices. That allowed it to crush estimates across the board and issue better-than-expected guidance.

ANET also reported earnings and revenue above consensus. The up-and-coming cloud-security stock was only added to the S&P 500 last summer.

You also have Albemarle (ALB). Technically a member of the materials sector because it’s a chemical maker, this company has exposure to technology because it supplies lithium for batteries. The top and bottom lines beat as management invested in lithium production to keep up with rising prices.

Where’s the Love for Nvidia?

While those obscure technology names pushed higher, high-profile chip maker Nvidia (NVDA) drifted aimlessly despite beating analyst estimates. This seems to be part of an ongoing trend of growth investors seeking opportunities in new areas.

Speaking of new areas, look at Norwegian Cruise Line (NCLH). The leisure stock has pushed back to its highest level since early October after higher fares caused earnings to beat estimates. Avis Budget (CAR), another travel-related company, had its biggest rally in almost seven years on its own set of strong numbers.

Don’t forget those moves follow a surprisingly strong quarter from hotel operator Hilton Worldwide (HLT). Once again, we see a trend of strong demand lifting prices for experience-related services.

In contrast, a hawker of mere merchandise like Wal-Mart Stores (WMT) failed to sustain a rally despite crushing estimates. The big-box retailer impressed on pretty much every front, benefiting from higher incomes, digital market-share gains and better comps. Investors still shrugged.

There were also some high-profile decliners. CVS Health (CVS) had its worst drop in over two years yesterday after revenue and guidance missed estimates. Once again, pricing was the story. Everyone’s focused on China, but don’t forget President Trump’s also been forcing drug prices lower. Is CVS on the wrong end of that trend?

Sharpie maker Newell (NWL) has been on the wrong end of trends like currency moves and shopping habits. The consumer-products conglomerate had its biggest drop in over a year after missing on most of its key areas.

Pepsi Moving More Cases

PepsiCo (PEP) fared better as a string of weak volumes finally showed signs of reversing. The soda maker’s also been cutting costs. Ironically, it rallied despite weak profit as investors looked for better finances down the road.

Rounding out the list, Devon Energy (DVN) ripped higher after production output beat estimates. The oil and gas company’s also shedding assets, which some analysts say could justify a significantly higher share price. Cadence Design (CDNS), a software company focused on semiconductor design, shot to a new record high after another strong quarter.

Mattel (MAT), on the other hand, crashed after surprising investors with a weak forecast. Southwest Airlines (LUV) dropped after warning the recent government shutdown would hurt results. And energy stock Concho Resources (CXO) dropped on weak earnings.