3 Stocks Shaking the Market
Some stocks are one-hit wonders, making a big splash when they first appear and then quickly fizzling into obscurity or oblivion. But for other stocks, that initial big move is only a preview for even bigger and better gains to come.
Today, we've listed three stocks that made some of the biggest upward moves over the past month, which we'll pair with the ratings issued by our Motley Fool CAPS community. The higher each stock's rating, the greater CAPS members' faith in that company's ability to keep on beating the market.
1-Month % Change
CAPS Rating (out of 5)
|InterDigital (NAS: IDCC)|
|Petrohawk Energy (NYS: HK)|
|Renren (NYS: RENN)|
Source: FinViz.com; one-month percentage change from June 24 to July 26.
While you were out, the markets have been jittery as the debt-ceiling debate continues to rage unchecked. So before we get shaken out again, let's see why the CAPS community thinks some of these companies might continue to outperform the market.
A patent value
Betting on a patent portfolio can be a tricky investment strategy. While patents provide a competitive moat of protection, they're good only until the next technological advancement comes along, making the current patents obsolete. Of course, while in play and dominant, patents can be potent weapons to wield against adversaries.
That's what InterDigital found out after bidding on bankrupt Nortel Network's patents took off, ending with a consortium of companies paying $4.5 billion for them. Considering that InterDigital holds 8,800 patents currently with some 10,000 patent applications pending, it decided to see just what the market would pay for its own wealth-generating portfolio.
Google (NAS: GOOG) was beat out by the likes of Research In Motion (NAS: RIMM) and Apple for the Nortel IP, but it's unclear whether Big G will aggressively go after InterDigital or just sit on the sidelines again, timidly guarding its cash horde.
CAPS member iamvoltron doesn't think Apple is going to cede any ground to Google in the latest round of potential bidding, but you can add the stock to your watchlist to see who ends up paying the prettiest penny for the portfolio.
Digging its way to riches
Oil and gas explorer Petrohawk Energy had the happy circumstance of owning valuable properties in the Eagle Ford shale region, but its problem was it didn't have the resources available to fully develop them. That was a situation crying out for some deep-pocketed investor to come along and snatch it up, which is exactly what BHP Billiton did with its $12.1 billion, $38.75-per-share offer.
Yet the uniqueness of the situation probably means investors shouldn't necessarily expect other players in the region, such as Cabot Oil & Gas or Magnum Hunter Resources (NYS: MHR) , to be similarly priced.
Although an investor has sued to stop the Petrohawk buyout from going through, and some have noted some curious options trading activity ahead of the announcement, Petrohawk's stock trades right in line with BHP's offer, meaning investors don't expect anyone to trump the bid.
Let us know in the comments section below or on the Petrohawk Energy CAPS page whether you think M&A in the oil and gas field will continue to boom.
Going social, China style
The potential is certainly there; it's just a matter of whether Renren can execute its strategy of exploiting it before it trips over itself in ignominy. Launched as "China's Facebook," the country's demographics make it tempting to think that Renren can capture the same growth trajectory that Facebook has.
The number of Chinese Internet users hit 485 million at the end of June, according to the China Internet Network Information Center, so the potential for growth is there. But overstating its user-base growth numbers, coupled with its subpar internal financial controls, make many fear that rather than becoming a social-media leader like LinkedIn (NYS: LNKD) is aspiring to be, Renren could prove just as disappointing as the numerous Chinese small caps that have fallen prey to fraud allegations lately.
With Facebook currently blocked from operating in China, CAPS member dpfranz believes Renren can overcome these early stumbles.
As long as the Chinese gov't keeps giving the stiff arm to Facebook and Google, this stock seems a good play, in spite of the majority ownership by the founder. But I'm keeping a close eye on the news. The day China allows Facebook in (if ever), this stock will drop like a rock...unless...they can establish significant brand value before Facebook can get in.
Tell us on the Renren CAPS page whether you think the company can grow into a social butterfly or whether it'll succumb to the foibles of other fraudulent companies.
Shake, rattle, and roll
With these stocks shaking the market this past month, it pays to start your own research on them at Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page.
At the time this article was published The Motley Fool owns shares of Google, Research In Motion, and Apple. Motley Fool newsletter services have recommended buying shares of InterDigital, Google, and Apple, as well as creating a bull call spread position on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributor Rich Duprey has no financial position in any of the stocks mentioned in this article. You can see his holdings. You can shake, rattle, and roll The Motley Fool's disclosure policy, but it still won't break.
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