Whoa! What Just Happened to My Stock?
Well, it could have been a lot worse as the markets rebounded from the worst of their fall. But resist the urge to high-five everyone in the cubicles next to you just because your stock strapped on a rocket pack instead. Smart investors won't celebrate until they know that upward leap was justified. Without a fundamental basis for the bounce, these stocks can quickly make the return trip down.
Is now the time to lock in profits, or is this just the first step toward even higher valuations down the road? Let's examine several stocks that just hit the afterburners and see whether they're truly headed into orbit.
CAPS Rating(out of 5)
|Goodrich (NYS: GR)||****||15.8%|
|MAKO Surgical (NAS: MAKO)||****||11.6%|
|Odyssey Marine Exploration (NAS: OMEX)||*||10.2%|
With the Dow Jones Industrial Average (INDEX: ^DJI) falling 108 points on Friday, or 1%, stocks that went appreciably higher are pretty big deals.
The guys without the blimp, aerospace-parts maker Goodrich, nevertheless took flight yesterday as rumors of a buyout made the rounds. Diversified manufacturer United Technologies was said to be looking to acquire the parts maker for as much as $128 a share. While they're currently hammering out a final price, Goodrich might want to make sure it doesn't try to wring too much from United, since Rockwell Collins and Textron are also on the short list of possible targets.
Buying Goodrich would fit in with United's varied parts, as it is a supplier to Boeing (NYS: BA) . United makes Pratt & Whitney engines and Sikorsky helicopters.
Analysts were expecting Goodrich to grow revenues at a 16% clip this year, generating profits almost 33% higher than the year before. It was those kinds of numbers that earned Goodrich its high ratings on CAPS and had 96% of the 484 members who weighed in on it believing that it would outperform the broad market averages.
Let us know in the comments section below or on the Goodrich CAPS page what you think the final purchase price might be.
Get hip to it
What Intuitive Surgical (NAS: ISRG) did for surgeons and Hansen Medical (NAS: HNSN) is doing for catheters, MAKO Surgical has done for knee replacement. They've all basically taken robotics and used them to advance minimally invasive techniques and technology that ease patients' recovery.
MAKO got a boost yesterday after announcing that it's adapting its devices for hip replacement as well. The market looks promising, too. According to Blue Cross-Blue Shield, between 2000 and 2009, the number of hip replacements has jumped 38% while the cost for the procedure has rocketed 72% higher, from $14,863 to $25,572. As MAKO makes its robotics more useful in more procedures, expect unit sales to grow exponentially.
CAPS member Clint35 thinks an investor need only look in one place to see the MAKO's potential: "See the price of Intuitive Surgical. Eventually the price of MAKO will be the same or higher."
Add the robotics specialist to your watchlist and then get hip to what others are saying on the MAKO Surgical CAPS page.
A betting man
There was no company-specific news to account for Odyssey Marine's jump yesterday (and as of this writing it's up another 9%), but Seeking Alpha ran an article suggesting that it's possible the ship salvager hit the mother lode.
Using a leased Russian ship, Odyssey has been searching for the SS Garriposa, sunk by World War II German submarines with $260 million worth of silver coin on board, Recently it sent another ship to assist the Russian one, but then without explanation, both ships returned to port and the leased vessel has apparently been sent off back to its owner. It's intriguing to think it may have discovered the wreck and no longer needs the other ship to do the salvage work -- but right now it's all speculation.
Highly rated CAPS All-Star member kkconway finds Odyssey Marine as poised to strike it rich. It has the potential Garriposa find, a previous find that's currently tied up in court, and several other lucrative projects that are still bubbling up.
First, it will probably get the lion's share of the loot -- half a billion dollars in silver, gold and treasure, from the "Black Swan," leaving Spain holding the bag. Then it has a couple hundred million in silver located in the English Channel ready for recovery. But that's not all! They have other deals with the Brits to salvage other valuable finds, and finally, they have a gold mine underwater in the South Pacific. This last is more iffy, but who cares? Just one of these works out to a pop.
You can add Odyssey Marine to your watchlist and let us know in the comments section below whether you think this is the "pop" kkconway was waiting for.
Going into orbit
That's why it pays to start your own research on these stocks on Motley Fool CAPS, where you can read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from the stock's CAPS page. Then you can decide for yourself whether your stock's headed for re-entry or off to infinity and beyond.
At the time this article was published Fool contributor Rich Duprey holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Textron. Motley Fool newsletter services have recommended buying shares of Intuitive Surgical and MAKO Surgical. 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. The Motley Fool has a disclosure policy.