Friday was a sluggish end to a tough week for the stock market, as major indexes gave up early gains to finish modestly lower. Investors struggled to understand conflicting assessments of the economy from various Federal Reserve officials, and although most now expect the central bank to cut interest rates by the end of this month, there's uncertainty about how big of a rate cut the Fed will deliver. Even amid uncertainty, some stocks enjoyed gains driven by merger and acquisition activity and earnings. Red Robin Gourmet Burgers (NASDAQ: RRGB), Gannett (NYSE: GCI), and Skechers USA (NYSE: SKX) were among the top performers. Here's why they did so well.
Activists follow through on Red Robin buy offer
Shares of Red Robin Gourmet Burgers climbed 12% after the burger chain got a buyout bid from a major shareholder. Vintage Capital Management said it would pay $40 per share to buy out Red Robin in a deal that would value the company at $519 million. The move follows up on a letter to Red Robin from Vintage last month, in which the institutional investor expressed dissatisfaction with the stock's recent performance and suggested a review of strategic alternatives. With the restaurant chain having failed to take steps to address those concerns, it'll be interesting to see what the next moves are both for Red Robin and for Vintage.
Image source: Red Robin Gourmet Burgers.
Gannett looks at a potential buyout
Newspaper and media specialist Gannett saw its stock jump 19% following news that the company is talking with a possible acquirer. GateHouse Media, which publishes hundreds of newspapers and community publications in the U.S., could buy Gannett in a deal involving cash and stock, essentially combining the biggest remaining newspaper publishers in the nation. Some believe that the only way for the newspaper industry to survive is through consolidation, and a combination like this would allow a larger company to save on costs. Even with today's gains, though, Gannett shares have still lost more than 70% of their value in the past four years.
Skechers walks the walk
Finally, shares of Skechers USA gained 12%. The footwear company said that sales hit record levels during the second quarter, lifted by particularly strong international revenue growth. COO David Weinberg pointed to India, China, the Middle East, and Mexico as especially notable contributors to overall growth, and CEO Robert Greenberg expressed confidence that the back-to-school season will result in good performance for the remainder of 2019 as well. Skechers' guidance for the third quarter reflected that optimism, and investors think that the footwear specialist is back in style among consumers.
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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Skechers. The Motley Fool owns shares of Red Robin Gourmet Burgers. The Motley Fool has a disclosure policy.