10 Stocks Shaking the Market

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In music they're called one-hit wonders, singers who belt out tunes but are never able to regain the magic of their big hit song. Think Norman Greenbaum's "Spirit in the Sky" or Brownsville Station's "Smokin' in the Boys Room." Monster hits never to be repeated.

We have seen similar one-hit wonders in stocks, like Pets.com or drkoop.com. Companies that burst on the scene -- many during the tech bubble heyday -- and failed to live up to the promise they held.

Whole lotta shakin' going on
While nostalgia's fun, "10 Stocks Shaking the Market" isn't about finding stocks that can't repeat their success, it's about looking at those that have made big moves and are likely to continue doing so.

To do that, we're looking at the 10 stocks that made some of the biggest moves up yesterday. We'll pair that with the ratings issued by our Motley Fool CAPS community. Higher ratings suggest that the members believe they'll continue to move higher in the future and outperform the market.

In the 20 months since we first began tracking the collective intelligence at CAPS in late 2006, the data shows that newly minted five-star stocks offer the best opportunities for investors, while the lowest-rated companies fared the worst. Four-star stocks outperformed the market by seven percentage points, and five-star stocks -- top honors in CAPS -- did even better.

Stock

% Change Yesterday

CAPS Rating (5 max)

Melco Crown Entertainment (Nasdaq: MPEL)

36.50%

****

Seabridge Gold

36.21%

**

Cliffs Natural Resources (NYSE: CLF)

30.25%

***

NRG Energy (NYSE: NRG)

29.33%

*****

Landry's Restaurant

28.41%

*

Nektar Therapeutics (Nasdaq: NKTR)

25.71%

**

China Architectural Eningeering (Nasdaq: CAEI)

25.31%

**

Ultra Oil & Gas ProShares

22.44%

***

National Oilwell Varco (NYSE: NOV)

22.20%

*****

BPZ Resources (AMEX: BPZ)

18.58%

****

Most of these stocks are viewed favorably by CAPS members, as evidenced by their ratings of three stars or better, but we're going to zero in on some of those earning a four- or five-star endorsement.

Melco Crown Entertainment
Investors must be envisioning a City of Dreams of their own as they pushed Melco's shares higher yesterday after the Macau casino operator said the worldwide credit crunch wasn't interfering with its plans to open its new casino early next year. But Macau gambling revenue in general has been slumping and China is cracking down on issuing visas to its citizens to visit the island.

Despite the troubles the island is experiencing, CAPS members seem to think that Melco will overcome what ought to be thought of as a temporary setback. Freddmo figures that even with the credit woes, Macau will benefit as gambling closer to home becomes the cheaper alternative.

This stock has no where to go but up. Macau gambling revenues can only be helped by the current money crisis in the world. People in Asia will opt to gamble closer to home rather than travel and Macau is the logical choice. At less than $4 a share the house will definitely be a winner on this one!

National Oilwell Varco
With analysts forecasting National Oilwell to post yet another consecutive quarter of better-than-expected results, investors drilled deep to push this industry equipment maker higher. CAPS member GenChaos figures that with all the talk of offshore drilling getting the green light, a company that makes the machinery to fuel that demand ought to do well.

Wow what a bargain. These guys are one of the few companies in the world that can make the equipment needed for drilling rigs. With even the dems talking up offshore drilling it's a good bet they'll do good business in the next few years.

With both presidential candidates promising more drilling to come, CAPS member maxhoffa figures the market's current slump will be a distant memory soon and Varco will be moving forward.

There will be lots of volatility for a while, expect traders to look to capitalize on any gains along the bottom here for a bit, but once the market starts trending up for good, you don't want to miss this stock. Should outperform the market for the foreseeable future.... [National Oilwell] is well positioned to benefit from either party holding the White House.

Shake, rattle, and roll
With these stocks shaking the market yesterday 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.

Closed for 15 months – opening 10 days only! Get notified ahead of time as our expert portfolio manager invests $1 MILLION in the best opportunities from across The Motley Fool’s premium investment services. This is the first open since August 2008, by invitation only. Enter email below.

Melco Crown Entertainment is a Motley Fool Global Gains pick. National Oilwell Varco is a Stock Advisor recommendation. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 21, 2008, at 11:59 PM, EaglesonUK wrote:

    I understand the point that the author was trying to make, but feel that he missed the mark with that table. The stocks listed were spread across all CAPS ratings, and the 5-star stocks didn't appear to do any better than the others.

    It would be more useful to show a graph comparing the gains by CAPS rating for yesterday, and then highlighting a few of the winners. A short tutorial on how to screen for them would also help.

  • Report this Comment On October 22, 2008, at 9:23 AM, TMFCop wrote:

    EaglesonUK,

    I like your thinking and you can find out that kind of information by going to the CAPS Top Tens page (link is just below the tabs).

    The first two lists that appear across the page are High-Rated Stocks and Low-Rated Stocks. Click on the "View More" link below the tables will give you lists of how the top 1000 5-star and top 1000 1-star stocks performed.

    Unfortunately at this time the Screener doesn't allow you to just screen for 3-star stocks one-day return (though you can get a 4-,13-, 26-, and 52-week returns).

    As for the tutorial, that might not be a bad idea. Thanks for reading!

    Rich

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Related Tickers

11/10/2009 9:59 AM
CLF $37.91 Up +0.11 +0.29%
Cliffs Natural Res… CAPS Rating: ****
NOV $45.67 Down +0.00 +0.00%
National Oilwell V… CAPS Rating: *****
NRG $24.86 Up +0.38 +1.55%
NRG Energy, Inc. CAPS Rating: *****
MPEL $4.63 Down -0.30 -6.09%
Melco Crown Entert… CAPS Rating: ****
NKTR $8.88 Down -0.03 -0.34%
Nektar Therapeutic… CAPS Rating: ***

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