5 Stocks That Will Make Big Moves This Week
Most Foolish investors would do well to heed the "slow and steady wins the race" mantra to retirement planning. But we're a motley bunch here, and we've got a little bit of something for everyone. If you're the type who likes big swings in the stock market, I'm serving up five stocks that will probably make big moves this week.
These stocks are heavily shorted, meaning a lot of folks are betting against them. When big news comes out, these stocks can make drastic moves -- either up or down -- based on whether the shorts are right. If they're wrong, we could see the creation of an epic short squeeze.
I've identified heavily shorted stocks before, and sure enough, they've made some pretty big moves. For example, when I did this experiment back in April, the average stock I highlighted changed price by an average of 10.4%.
Here are this week's five stocks to be aware of:
% Shares Short
Advanced Micro Devices
To understand why Peabody isn't getting any love from the market's short-sellers, all you need to know is that its America's largest coal producer. Ever since the Great Recession -- and the election of President Obama, who is no fan of the industry -- demand for coal has been in the dumps.
Part of that is due to plummeting demand for coal in North America, while vast reserves of natural gas are making up the difference. That has left Peabody to rely on international demand for sales. So far, that hasn't worked out very well, as earnings have steadily fallen since the second quarter of 2011.
Advanced Micro Devices
Shareholders of AMD, a leading semiconductor business, don't have too much to complain about this year. The company's stock is up more than 60%, with much of that jump coming after the company's first-quarter earnings announcement in late April.
But overall, the outlook is still iffy for this company. The key for investors is to focus on whether AMD can diversify outside the shrinking PC market and into both gaming and cloud services. Initial results from the company's new graphics API, Mantle, will probably play a role in how investors will react to this week's earnings report.
The second chipmaker on this list, Cypress hasn't experienced near the same success as AMD this year. In late September, the company's stock fell 21% over the course of two days. The culprit: lowered guidance based on weakness in the mobile-handset industry.
It will be particularly interesting to see what management has to say on its earnings call. Cypress is in the unenviable position of supplying technology to a high-end market that's become saturated, causing margins to shrink industrywide.
The maker of the da Vinci Robotic Surgical System has a long history of creating shareholder wealth, but it's been a tough year for the company nonetheless. Surgeons have begun to question the efficacy of robotic-assisted surgery, and system sales have slumped significantly in the United States.
Uncertainty surrounding the effects of the Affordable Care Act could easily lead to continued disappointment in North America. While this may validate the shorts' concerns, I still believe surgeons can use da Vinci in lots of further operations worldwide, and that the stock is still a solid long-term bet.
Finally, we have SUPERVALU, which runs a number grocery chains nationwide, with the Save-A-Lot brand representing the most important one. So far this year, the company's stock is up an astonishing 250%, thanks largely to selling off some of the least profitable chains and cutting costs wherever possible.
But don't color me a believer in this company. Though SUPERVALU also has a food-service division, the stock can be supported only if there's continued growth in its grocery chains. But those chains have shown a consistently alarming decline in same store sales.
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The article 5 Stocks That Will Make Big Moves This Week originally appeared on Fool.com.Fool contributor Brian Stoffel owns shares of Intuitive Surgical. The Motley Fool recommends Cypress Semiconductor and Intuitive Surgical and owns shares of Intuitive Surgical. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.