Why AeroVironment, Intelsat, and World Wrestling Entertainment Jumped Today

Stocks fell on Wednesday amid persistent worries over U.S. trade policy, giving up earlier gains as the Trump administration opted to use existing law to restrict Chinese investments in the United States. This marked a softer-than-expected stance that initially eased concerns over the fallout of a potential trade war between the two countries.

But some individual stocks largely bucked the negative trend. Read on to learn why AeroVironment (NASDAQ: AVAV), Intelsat (NYSE: I), and World Wrestling Entertainment (NYSE: WWE) each rallied today.

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AeroVironment delivers a beat

Shares of AeroVironment popped 7.1% after the unmanned aerial vehicle leader announced strong fiscal fourth-quarter 2018 results. AeroVironment’s revenue climbed a modest 1.5% to $117.4 million, which translated to net income attributable to the company of $0.77 per diluted share. Most investors were only looking for earnings of $0.54 per share on revenue of roughly $116 million.

AeroVironment also elaborated on its recent agreement to sell its efficient energy systems (EES) business, which leaves the company better focused on its core unmanned aircraft systems operations.

“As a repositioned, pure-play solutions company with significant growth opportunities across our Unmanned Aircraft Systems and Tactical Missile Systems businesses and record funded backlog of $174.3 million, we have entered Fiscal 2019 from a position of strength,” said CEO Wahid Nawabi.

An eye-popping bullish case for Intelsat

Shares of Intelsat initially soared as much as 21% this morning, but gave up their gains as the market fell, ultimately closing down 0.9% after Kerrisdale Capital analysts offered a very bullish case for the satellite company.

In a press release this morning, Kerrisdale argued that the FCC is likely to approve a proposal by Intelsat for “repurposing parts of [its] spectrum for 5G mobile use in the near future.”

Kerrisdale believes that Intelsat could free up and sell off the spectrum that it doesn’t need for as much as $60 billion over “a few years.” That would mean its share price could soar to as much as $150 per share, according to the analyst — an enormous leap from Intelsat’s current trading price of less than $18.

As fellow Fool.com contributor Rich Smith pointed out this morning, however, investors should keep in mind that Kerrisdale has a history of making sensational predictions on volatile momentum stocks. So while it’s no surprise shares popped earlier, it seems the market is taking this one with a grain of salt.

WWE inks two massive deals

World Wrestling Entertainment stock jumped 6.4% after the media and entertainment company announced new multiyear rights deals with both the USA Network and Fox Sports.

Late yesterday, WWE announced new five-year agreements with both networks beginning Oct. 1, 2019. Under the deals, Monday Night Raw will continue to air on USA, and SmackDown Live will be distributed every Friday by Fox Sports on the Fox broadcast network. Perhaps most exciting, this increases the average annual value of WWE’s U.S. distribution to 3.6 times the value of the previous agreement with NBCU.

WWE also believes it will complete new content distribution agreements in the U.K. by the end of 2018, and in India in the first half of 2019. As such, WWE is targeting adjusted operating income before depreciation and amortization (OIBDA) of “at least $200 million” for 2019 — up from guidance of at least $150 million for this year — despite the fact that the new U.S. agreements will only be in place for three months at the end of next year.

As such, it should be no surprise to see WWE stock touching an all-time high today.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends AeroVironment. The Motley Fool has a disclosure policy.

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