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, I've listed three stocks that made some of the biggest upward moves over the past month, despite the incredible volatility in the market, which I'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)
|Pharmasset (NAS: VRUS)||99.5%||*|
|Force Protection (NAS: FRPT)||53.1%||***|
|Barnes & Noble (NYS: BKS)||48.7%||*|
Source: FinViz.com; 1-month % change from Oct. 14 to Nov. 14.
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
The market for hepatitis C therapies is scorching right now, with Pharmasset and its interferon-free treatment attracting the attention of Gilead Sciences (NAS: GILD) , which came courting with an $11 billion buyout offer. It's also why investors think Inhibitex (NAS: INHX) might be next on the buyout list: it successfully passed mid-stage trials for its INX-189 hepatitis C therapy.
The global hepatitis market was valued around $5 billion in 2009 and could be worth as much as $15 billion by 2019. While the current standard of care is interferon-based therapies, it's a mixed bag, and there are significant side effects that make it a dicey regimen even for patients who respond well to it. While Roche bought out Anadys Pharmaceuticals for $230 million because its setrobuvir drug is being tested in combination with Roche's pegylated interferon treatment, the pharmaceutical giant is still pursuing development of an interferon-free hep C treatment. Abbott Labs also says its interferon-free treatment could achieve $2 billion in annual sales if approved for sale in 2015.
As I said, this is the space to be in now, but keep an eye on Pharmasset's buyout offer by adding the stock to your watchlist.
The road less traveled
It was a buyout offer causing Force Protection to propel forward like a rocket-propelled grenade.
General Dynamics (NYS: GD) sees the writing on the wall. While the prospects are slim for permanent across-the-board spending cuts triggered by the supercommittee's failure to reach a deficit reduction agreement, President Obama's July debt deal (which created the supercommittee) already put in motion some deep Defense Department cuts. Contractors like GD, Lockheed Martin, and Boeing (NYS: BA) are coming under increasing pressure to defend their projects from the budget ax.
But Force Protection's armored cars remain a highly sought-after vehicle, so General Dynamics figured bringing the program under its umbrella would offer it a measure of protection.
That might be why 93% of the CAPS members rating Force Protection thought it would exceed the returns of the broad indexes. Add the defense contractor to your watchlist, and let us know in the comments section below what you think the Defense Department's future budget will look like.
Does knowledge of the book market give Barnes & Noble and edge over Amazon.com (NAS: AMZN) as their respective e-readers duke it out in the marketplace? Well, you can't discount Amazon's own book pedigree, but I think the bricks-and-mortar bookseller realized early on the threat that electronic versions posed to its model, and its Nook e-reader has been generally well received. Amazon's Kindle Fire may be the flavor of the month this holiday season, but Barnes & Noble's dual business line gives it the edge, and its new Nook Tablet gives it a run for the (extra) money.
There are some people who won't give up a real book for an electronic one, and though you can order the real thing through Amazon, there's also something to be said for standing among the racks. I'm no Luddite, and I've bought books from Amazon before, but I generally still shop Barnes & Noble for most of my reading needs.
Like DVDs standing athwart the advance of streaming video, there may come a time when physical books are replaced by electronic versions. I don't think that time is soon, and Barnes & Noble will reap the rewards. That's why I've rated the bookseller to outperform the broad market averages. CAPS members are almost evenly divided on the question, though, with the broader community leaning in favor of its ability to beat the Street and the All-Stars tilted just so slightly against it.
Thentor is one of those who sees Amazon as just a more nimble rival that can outmaneuver the bookseller with its heavier footprint: "B&N is stuck in the stone age when it comes to inventory mechanics. I can't see how they'll compete with agile [Amazon], even with Nooks."
Add the bookseller to the Fool's free portfolio tracker, and tell us on the Barnes & Noble CAPS page whether the Nook will help it turn the page on growth.
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 short bio. The Motley Fool owns shares of Abbott Laboratories, Lockheed Martin, and General Dynamics.Motley Fool newsletter serviceshave recommended buying shares of Amazon.com, Abbott Laboratories, and Gilead Sciences. 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.