You saw the headlines. You know your stock price made a big move -- up or down. 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.
72 inches down
Occasionally it happens that a company flubs a hiring event, but not often and not in the fashion that ATP Oil & Gas (NAS: ATPG) did when it appointed a new CEO only to have him resign six days later because the two sides couldn't come to an agreement on a contract.
CAPS member awallejr admits this one-time "market darling" seems to enjoy stumbling over itself, but that at its current valuation the upside far outweighs the prospects of it actually going to zero. This sentiment is not so far afield considering its Gulf of Mexico concessions and the Shimshon well project off the coast of Israel in the Levant Basin, where it started drilling its first well. Since it's also resumed production at its Titan platform at the Telemark Hub in the Gulf, it may at least allow itself to generate some cash inflows instead of always pumping cash out.
Considering ATP's debt situation, this would be a welcome development. The independent oil and gas driller has a debt-to-equity ratio north of 1,400%, compared to Linn Energy (NAS: LINE) at 122% and Noble Energy (NYS: NBL) at 59%. So the risk of bankruptcy certainly looms and can't be easily dismissed, though a takeover by some more financially secure operator is always a possibility too. Assuming the debt load might be a big hurdle to get around, but the properties it possesses might be enough of an attraction.
Still, I find it hard to recommend the company's shares at this point with all the turmoil ATP is going through. Such distractions at the top level have a way of working down to the rigs. The driller's shares fell 20% this week, continuing to fall even after the CEO hiring snafu passed. Yet PixelFreakz notes that almost 50% of ATP's float is sold short, so even the least bit of good news could send its stock soaring on a short squeeze.
Tell me on the ATP Oil & Gas CAPS page or in the comments section below whether you think it can stop the revolving door and get its act together, then add the stock to the Fool's free stock-tracking service to see whether it can strike it rich.
Not as easy as 1-2-3
Wait a minute! You mean A123 Systems' (NAS: AONE) leading lithium ion batteries that were going to lead the auto industry to the next technological frontier should be forgotten and we should now believe its Nanophosphate EXT technology is really the advance we've been waiting for?
Let's forget for a moment that the lithium ion batteries were subject to a major recall that's going to cost it a quarter of its projected full-year revenues. Let's also forget that the battery maker is burning through cash that makes the prospect of it becoming yet another taxpayer-subsidized green-tech firm about to go bust a very real possibility. Its last 10-Q said there's substantial doubt about its ability to continue as a going concern.
Instead focus on the fact that there's simply no real demand for electric cars yet, despite all the government handouts and marketing they've been given. General Motors' Volt sales are still anemic (just 7,000 since the start of the year) even if they outpace Nissan's Leaf (2,600 sold). Mistubishi sold all of 85 of its EV i cars in May and Ford (NYS: F) said it's delivered its first electric Focus to customers -- without saying how many that was.
It's a bit fortunate, isn't it, that just as A123 is getting ready to implode as it needs to raise more money from private investors (getting more government handouts might be problematic these days, though it was given a two-year extension to hit production targets), it's able to announce a technological breakthrough that's going to pull its fat from the fire? Sorry, I'm not buying it for a minute, nor apparently is the Fool's Rich Smith, who goes by TMFDitty on CAPS and say that "claiming to have built a better battery still doesn't make you a better -- much less a good -- investment. Underperform. All the way to zero."
Add A123 to the Fool's free portfolio tracker to see whether it is getting ready to go or is really just getting ready to go under.
Read all about it!
Both of these stocks made a lot of noise this week, but if they carry too much risk for you, there's another company you may want to check out. The Motley Fool has found one with so much promise that they've dubbed it "The Motley Fool's Top Stock for 2012." This up-and-coming multibagger is highlighted in a free report that discusses how it's revolutionizing commerce in Latin America. You can get instant access to the name of this company by clicking here to download it now
At the time thisarticle was published Fool contributor Rich Duprey holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Ford. Motley Fool newsletter services have recommended buying shares of General Motors and Ford. Motley Fool newsletter services have recommended creating a synthetic long position in Ford. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.