You saw the headlines. You know your stock price made a big move. But what does that portend for your investment's future?
By pairing the latest news with the collective wisdom of our 180,000-strong Motley Fool CAPS investing community, we might be able to discover whether your stock's latest exploits are a short-term hiccup -- or the start of a much bigger trend.
The following stocks have all made big moves over the past five trading days.
CAPS Rating(out of 5)
Change Past Week
Aeropostale (NYS: ARO)
Inhibitex (NAS: INHX)
Source: Motley Fool CAPS; % change from Oct. 28 to Nov. 4.
A crude assessment
The cost of cotton had clothing retailers like Aeropostale and American Eagle Outfitters (NYS: AEO) looking like their financial statements had been swarmed by boll weevils. It's no small coincidence that the decline in the commodity's cost has led to an increase in the retailers' results. As the price of cotton was cut in half from its March highs, American Eagle is up more than 40% from its recent lows and Aeropostale is 90% higher.
It's also a good reason why, despite reporting sales falling 1% last quarter, Aeropostale was able to show higher profits and raise its earnings guidance for the year, too. It's not yet returned to its ways as the high-flying king of the recession, but the clothier is gathering together the threads of growth once again.
With more than 1,100 CAPS members weighing in on Aeropostale, it's clear they don't think the retailer will face a rundown again, as 94% of those registering an opinion think it will outperform the broad indexes. Tell us in the comments section below who's going to come out ahead in the end, and then add Aeropostale to the Fool's free portfolio tracker to see how it all plays out.
The new hep cats
The global hepatitis market was valued around $5 billion in 2009 and could be worth as much as $15 billion by 2019. There are approximately 170 million new hepatitis C cases diagnosed every year, making it an obvious target for larger drug companies like Merck (NYS: MRK) and GlaxoSmithKline (NYS: GSK) to build on the acquisitiveness of Roche, which bought Anadys Pharmaceuticals (NAS: ANDS) for $230 million.
Alone or as part of some larger pharmaceutical partner, investors went wild after news of Inhibitex's hep C therapy INX-189 performed well in mid-stage trials with no serious side effects, when given to patients with a certain form of chronic hepatitis who have not been treated.
Yet there's still lots of time for things to go awry, as happens all too often, and though Inhibitex's shares are up another 10% so far in trading today, there could be any number of setbacks along the way. The FDA is not known as a fickle agency for nothing, as highly rated CAPS All-Star TSIF correctly points out: "There are too many steps left in the windy road where results could temper the excitement and I expect a pullback."
Add Inhibitex to your watchlist, and then tell us on the Inhibitex CAPS page whether you think this news will propel it to the forefront of a buyout offer.
At the time thisarticle was published Fool contributorRich Dupreyowns shares of Aeropostale, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Aeropostale.Motley Fool newsletter serviceshave recommended buying shares of GlaxoSmithKline. 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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