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)
Pacific Ethanol (NAS: PEIX)
Transatlantic Petroleum (NYS: TAT)
Procera Networks (NYS: PKT)
Source: FinViz.com; one-month percentage change from Nov. 3 to Dec. 5.
While you were out, the markets rebounded, but they may turn tail again if Europe's fragile financial system falls apart. 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
Higher volumes of ethanol sold, better earnings, and the retirement of some of its debt have all banded together to boost the share price of Pacific Ethanol, one of the leading players in the ethanol industry. Yet the results seem as solid as the fumes the fuel emits.
Although the total volume of ethanol gallons sold jumped 72% to over 122 million gallons, it was largely due to bringing online its Stockton facility that hadn't been operational last year. It also benefited by a 54% increase in the price of ethanol, which jumped from $1.81 to $2.79 a gallon. It did retire in full its $35 million senior convertible notes, so it has improved financially.
Yet the mercurial ethanol producer has had a spotty financial history, so that with the blender tax credit expiring at the end of this month, an investor looking for worthy ideas in the space would probably be better served with Archer Daniels Midland (NYS: ADM) . And ethanol demand might not be as robust as it seems, since product might have been pushed out the door to gain as much as possible before the tax credit's demise.
With almost three-quarters of CAPS All-Stars rating Pacific Ethanol to underperform the market, it's clear they don't think much of the bounce it has enjoyed, but add the stock to your watchlist and see whether investors are willing to fill up their portfolios with ethanol.
The road less traveled
A string of poor earnings reports has beaten down oil producer Transatlantic Petroleum, heightening the risk associated with its strategy of looking for oil in out-of-the-way locations. They might seem exotic on a travel brochure, but pursuing oil in Turkey, Romania, and Bulgaria carries risks all its own.
For example, workers recently were attacked and killed in Turkey. It's also trying to help Bulgaria reduce its dependence on Russia for all of its oil, no small achievement if it succeeds, though Transatlantic isn't without competition -- Chevron (NYS: CVX) already has a presence there. Transatlantic is trying to win a concession to begin production next year.
The oil producer was able to achieve 74% higher sales in the quarter, though, like Pacific Ethanol, it benefited from higher prices.
Such strong top-line growth bolsters the view that TransAtlantic can successfully compete, but it abandoned an exploration well in Morocco earlier this year and is exiting its oilfield-services business. The CAPS community apparently believes the more focused vision is the right one, as 98% of those rating it say it willoutperform the broad market averages. Monitor how well TransAtlantic Petroleum fares down the road by adding the stock to the Fool's free portfolio tracker.
It wasn't just new business that helped propel Procera Networks' third-quarter results, but follow-on orders from existing customers caused revenues to jump 158%, bookings to increase 360%, and profits to nearly triple.
Using its intelligent policy enforcement technology to become the central intelligence point by small- to mid-sized ISPs building out their networks, they're able to gain insight into what's happening on their networks while retaining scalability. The thing is, it's not just small carriers, but governments, educators, and mobile providers, too. Tier 1 cable and mobile carriers in Asia are signing up as well, while here it home it got a $3 million follow-on order from a Tier 1 cable operator that's been keeping tabs on Netflix's (NAS: NFLX) streaming service.
As mobile and broadband network operators seek to manage the rapid growth of data, they have lots of companies to choose from, including leading players such as Cisco (NAS: CSCO) . Increasingly though, they're choosing Procera.
Despite such compelling results and a stock price that's tripled over the past year, Procera still flies under the radar of most of Wall Street and Main Street. Fewer than 100 CAPS members have weighed in on the operator, and only two analysts follow it, yet 97% of those investors rate it to outperform the market, as do both pros.
CAPS member pchop123 believes the company has "great potential," so add Procera to the Fool's free portfolio tracker and tell us on the Procera Networks CAPS page whether the really intelligent thing here is to climb aboard the stock now.
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 thisarticle was published Fool contributorRich Dupreyowns shares of Cisco Systems, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares and has created a bull call spread position on Cisco Systems.Motley Fool newsletter serviceshave recommended buying shares of Chevron, Cisco Systems, and Netflix. 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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