In music, they're called one-hit wonders, artists that belt out a memorable tune but are never able to regain the magic of that 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've seen similar one-hit wonders in stocks, too, such as Pets.com or drkoop.com. These companies burst onto the scene -- many during the tech-bubble heyday -- and never to live up to the promise they held.
Nostalgia is fun, but "10 Stocks to Shake the Market" is all about avoiding stocks that can't repeat their success. We want to find those that have made big moves and are likely to continue doing so.
To do that, we're looking at 10 stocks that made some of the biggest moves upward over the past month. We'll then pair that information with the ratings from our Motley Fool CAPS community. High ratings from our CAPS members suggest an optimism that those stocks will continue to move upward and outperform the market.
In the 20 months since we 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.
This week's contenders
|
Stock
|
30-Day % Change
|
CAPS Rating
|
|
AECOM Technology (NYSE: ACM )
|
80.69%
|
****
|
|
Aluminum Corp of China (NYSE: ACH )
|
46.62%
|
****
|
|
AMAG Pharmaceuticals
|
42.57%
|
**
|
|
American Axle & Manufacturing (NYSE: AXL )
|
38.60%
|
*
|
|
Aurizon Mines (AMEX: AZK )
|
80.67%
|
***
|
|
Ford (NYSE: F )
|
67.33%
|
**
|
|
Hill International
|
64.41%
|
****
|
|
Huaneng Power (NYSE: HNP )
|
54.79%
|
*****
|
|
Plug Power
|
43.68%
|
*
|
|
Tanzanian Royalty Exploration
|
39.72%
|
**
|
Half of these stocks carrying a three-star-or-better rating. Let's see why the CAPS community thinks even some of their lesser lights might outperform the market.
Ford
While much of the iconic automaker's gains came yesterday, as it became apparent that Congress and the White House were nearing agreement on a bailout plan for Detroit, the notion has been building for some time that Ford is just not as sickly as its domestic rivals. Indeed, Ford has said that it doesn't need any short-term bridge loans, like General Motors (NYSE: GM ) and Chrysler are seeking. It's simply hoping for a line of credit to draw down on in the event that either (or both) of its Detroit brethren takes a dirt nap.
Ford's strength relative to its U.S. rivals has attracted CAPS member jason867, who figures the automaker has reached an inflection point:
Financially speaking, they're in [better] health than the other two. They're ahead in producing fuel efficent cars. Lowered fuel prices in the short term will likely boost truck sales. Eventually we'll be coming out of this recession.
Basically, they've been beaten down to the brink of death, and seemingly survived. They have nowhere to go but up.
AECOM Technology
President-elect Obama has promised a huge push to rebuild the country's infrastructure as a means for jumpstarting the economy. CAPS member Hoping2Retire thinks architecture and engineering firms like AECOM Technology could benefit most:
There will be significant pressure for new infrastructure project investments in US and Europe to reduce unemployment in the next several years. Additionally Asia will continue its massive investments in this area and, accordingly, I architecture and engineering firms should do well.
Shake, rattle, and roll
It pays to start your own research on these market-shaking companies 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.
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