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Why Chuy's Holdings, Zayo Group Holdings, and Diamondback Energy Jumped Today

Dan Caplinger, The Motley Fool

Wednesday was mixed on Wall Street, as major indexes ended the session on either side of the unchanged level. Comments from the White House seemed to indicate that despite President Trump's threats of more tariffs against China, a potential resolution to trade disputes is still possible. Fears over global economic conditions receded a bit, and some favorable news from several prominent companies helped improve market sentiment. Chuy's Holdings (NASDAQ: CHUY), Zayo Group Holdings (NYSE: ZAYO), and Diamondback Energy (NASDAQ: FANG) were among the top performers. Here's why they did so well.

Chuy's spices things up

Shares of Chuy's Holdings soared 15% after the Tex-Mex restaurant chain reported favorable results in its first-quarter financial report. Solid gains in revenue, profit, and comparable-restaurant sales all pointed to a brighter future for the Austin-based restaurant specialist, and despite higher labor costs and the company's decision to slow the pace of its expansion, early results of Chuy's new national marketing campaign appear to be positive. The restaurant industry is still ultra-competitive, but no one else can match Chuy's queso, and shareholders hope that its restaurant rivals won't be able to match its comps gains either.

Various Chuy's signs over the course of its history.

Image source: Chuy's Holdings.

Zayo makes a deal

Zayo Group Holdings saw its stock climb 8% after the digital infrastructure specialist agreed to terms for a pair of private equity investors to acquire the company. Zayo said that global investment companies EQT and Digital Colony Partners will pay $14.3 billion in cash for the company, giving shareholders $35 per share for their stock. Zayo CEO Dan Caruso explained that the two institutional investors share its vision for the future of fiber networks and appreciate the company's assets. Despite the gains, though, Zayo still trades around $2 below the $35-per-share deal price, suggesting some uncertainty about its conclusion.

Diamondback plans a big buyback

Finally, shares of Diamondback Energy gained 8%. The oil and gas exploration and production company said that revenue soared during the first quarter of 2019, reflecting Diamondback's recent purchase of Energen. Although net income sagged due in part to derivative-related losses, Diamondback investors were pleased that the energy company's board of directors approved a $2 billion capital return program that will initially take place via stock repurchases. CEO Travis Stice was pleased that Diamondback managed to make it through tough conditions near the end of 2018 to keep production rising, and even though some asset sales forced it to cut production targets, Diamondback appears ready to use the cash flow from its successful operations to reward shareholders for their patience.

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Dan Caplinger owns shares of Chuy's Holdings. The Motley Fool owns shares of and recommends Chuy's Holdings. The Motley Fool recommends Zayo Group. The Motley Fool has a disclosure policy.