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, despite the incredible volatility in the market, 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)
|MELA Sciences (NAS: MELA)||88.6%||*|
|Pandora Media (NYS: P)||49.2%||*|
|Goodrich (NYS: GR)||30.2%||***|
Source: FinViz.com. One-month percentage change from Sept. 6 to Oct. 6.
While you were out, the markets collapsed and may continue to do so as the impact of the U.S. credit downgrade filters through. 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 mighty temblor
Last month, medical-device maker MELA Sciences got European regulatory approval to market its MelaFind cancer-detection device over there, sending its shares soaring. The MelaFind emits light waves to capture images of suspected lesions and uses a sophisticated algorithm trained on MELA's database to analyze the images and determine whether a biopsy is needed.
It's been something of a muddier situation here stateside, where the MelaFind has been mired in the regulatory morass of FDA indecision for years. It finally got closer to its goal, however, when the agency issued an approvable letter though burdened it with a host of restrictive labels.
With the approvals, though, MELA's stock price has nearly tripled in value in since the end of August, but it's still down 7% from the year-ago period because of the delays it has encountered along the way. CAPS member MChoice thinks the critics have gotten MELA wrong for a number of reasons, making the stock significantly undervalued.
The reasons behind this stock being so ridiculously cheap are a) the FDA's malfeasance and misinterpretation of the trial data. b) the completely misguided and shortsighted analysis, on all fronts, from all public channels whether they be analysts, reporters or otherwise. c) Blatant price manipulation that comes with low volume and a stock being in limbo. MELA is artificially cheap.
Tell us in the comments section below or on the MELA Sciences CAPS page if you think it can find its way to growth, and then add the device maker to your Watchlist to keep track of its progress.
Not so precious
Internet-radio pioneer Pandora Media got a boost from analysts seeing potential for advertising revenue growth, broader listener awareness, and wider platform availability, even disinterested ones without a financial stake in its future. General Motors (NYS: GM) gave it another jump-start when it included CUE in its Cadillac line of cars. Pandora is part of CUE's infotainment systems and may be the start of a threat to Sirius XM Radio's (NAS: SIRI) lock as the dashboard alternative to terrestrial radio.
Pandora's problem is that its costs outstrip its revenues, with content-acquisition costs jumping 130% in the latest quarter while revenues rose 117%. To grow, Pandora is going to need to increase the number of people listening, but it costs more to get them -- one of the reasons CAPS member materialsman92 wouldn't tune in to this stock as an investment.
Their costs increase per hour of listening. So the more people that sign up the more it costs Pandora. This is not a sustainable business. They need to find other ways to make money other than just advertisement.
Add Pandora Media to your Watchlist, and let us know in the comments section below whether you'll be listening to its siren song.
The rumors of a buyout proved true as United Technologies (NYS: UTX) came through with an offer to buy aerospace-parts maker Goodrich for $16.5 billion cash. What's good for Goodrich investors, though, isn't necessarily good for United's, as the conglomerate said it was going to be cutting back on expenditures it makes elsewhere for the next few years as it takes time to digest this big bite. Analysts though think the overall effect will be positive.
Indeed, Goodrich was expected to increase profits by 33% on 16% growth in revenues this year. Its parts are used on both Boeing's (NYS: BA) new Dreamliner aircraft. As a result of the acquisition, United is rearranging its business to suit the new addition, with aerospace and engines in one, and climate, controls, and security systems in the other. Investors haven't had much enthusiasm for the purchase, and United's shares trade lower than before the deal was announced.
Add the parts maker to the Fool's free portfolio tracker to see whether the deal gets done, and tell us on the Goodrich CAPS page whether you'll be buying United Technologies' shares with the money you'll receive.
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 Fool contributorRich Dupreyholds no position in any company mentioned. Check out hisholdings and a shor bio.Motley Fool newsletter serviceshave recommended buying shares of General Motors. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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