U.S. Markets close in 3 hrs 54 mins

Why Blue Apron Holdings, Cato, and Universal Jumped Today

Dan Caplinger, The Motley Fool

Thursday was generally a weak day for the stock market, although declines for most major benchmarks were relatively modest. Most of the attention among investors focused on the decision by the U.S. to cancel its proposed meeting with North Korean leaders, with the White House citing the harsh tone of recent North Korean comments. Yet despite the return of concerns that military conflict will be the only eventual resolution to the issue, markets didn't have a huge negative reaction, and good news helped shares of some high-profile individual companies. Blue Apron Holdings (NYSE: APRN), Cato (NYSE: CATO), and Universal (NYSE: UVV) were among the best performers on the day. Here's why they did so well.

Blue Apron delivers

Shares of Blue Apron Holdings rose 4%, riding positive momentum following strategic moves that included the naming of a new chief financial officer and lining up well-known celebrity spokesperson Chrissy Teigen with a promotional partnership deal. Today's move also seemed spurred by supermarket giant Kroger's decision to purchase home meal-kit specialist Home Chef in a deal that allowed for a $200 million up-front payment and up to $500 million in milestone payments if the business achieves certain financial objectives. Many investors think Blue Apron will need to find a buyer in order to realize full value, but at this point, the stock price is low enough that shareholders can expect to see wild swings in both directions as speculation mounts.

Meal kit box with about 10 different ingredients and Freshness Guaranteed graphic.

Image source: Blue Apron.

Cato has a good quarter

Cato stock surged almost 20% after the value-priced fashion specialist reported fiscal first-quarter financial results. Net income rose 5% despite a 1% drop in both overall revenue and same-store sales, and CEO John Cato said that the company is "starting to see more favorable sales trends as a result of adjustments to our merchandise strategy." Gross margin rose due mostly to better merchandise pricing practices, and lower tax rates played a key role. It's more important than ever for retailers to find paths forward to differentiate themselves from failing peers and find long-term success, and investors think that a value-conscious business model could be the right answer to address concerns about the potential demise of brick-and-mortar stores in the long run.

Universal pays shareholders

Finally, shares of Universal soared 30%. The tobacco grower said in conjunction with its first-quarter financial report that it would boost its dividend by 36% as part of a larger-scale strategy toward boosting the amount of capital it returns to shareholders. Going forward, Universal will pay $0.75 per share on a quarterly basis, working out to the dividend yield of nearly 5% even after the big jump in the stock price. CEO George Freeman said that after considerable thought, "we have reaffirmed that our mission is to remain the leading global leaf tobacco supplier." What may have added to the excitement was a reference to "adjacent industries and markets that utilize our assets and capabilities" beyond tobacco, which some will interpret as possibly opening the door to commercial marijuana production.

More From The Motley Fool

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