What Happened?
A number of stocks jumped in the afternoon session after investor sentiment improved on renewed optimism that the US-China trade conflict might be nearing a resolution. According to reports, Treasury Secretary Scott Bessent reinforced this positive outlook by describing the trade war as "unsustainable," and emphasized that a potential agreement between the two economic powers "was possible." His comments signaled to markets that both sides might be motivated to seek common ground, raising expectations for reduced tariffs and more stability across markets.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, following stocks were impacted:
- Home Builders company LGI Homes (NASDAQ: LGIH) jumped 6.2%. Is now the time to buy LGI Homes? Access our full analysis report here, it’s free.
- Hardware & Infrastructure company Super Micro (NASDAQ: SMCI) jumped 5.2%. Is now the time to buy Super Micro? Access our full analysis report here, it’s free.
- Branded Pharmaceuticals company Organon (NYSE: OGN) jumped 7%. Is now the time to buy Organon? Access our full analysis report here, it’s free.
- Advertising & Marketing Services company Ibotta (NYSE: IBTA) jumped 5%. Is now the time to buy Ibotta? Access our full analysis report here, it’s free.
- Professional Staffing & HR Solutions company ManpowerGroup (NYSE: MAN) jumped 5.5%. Is now the time to buy ManpowerGroup? Access our full analysis report here, it’s free.
Zooming In On Organon (OGN)
Organon’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock gained 12.5% on the news that the company reported fourth-quarter 2024 results that topped analysts' revenue and EPS expectations. While sales were flat year on year, strength in Established Brands helped offset declines in Biosimilars and Women's Health. However, the company's full-year revenue outlook came in lower than expected, reflecting headwinds from foreign exchange and the loss of exclusivity for Atozet (the second-largest product) in key markets. Overall, this quarter was decent, but not perfect.
Organon is down 24.8% since the beginning of the year, and at $11.25 per share, it is trading 51.1% below its 52-week high of $23.03 from August 2024. Investors who bought $1,000 worth of Organon’s shares at the IPO in May 2021 would now be looking at an investment worth $338.36.
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