10 Stocks to Shake the Market

In music, they're called one-hit wonders: singers who belt out one hit tune, but are never again able to regain the magic of that single big 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, too, like Pets.com or drkoop.com. These companies burst onto the scene -- many during the tech-bubble heyday -- but never lived up to the promise they seemed to hold.

Whole lotta shakin' going on
While nostalgia is fun, "10 Stocks to Shake 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 10 stocks that made some of the biggest upward moves over the past month. We'll then pair that information with the ratings issued by our Motley Fool CAPS community. Higher ratings suggest the members believe those stocks will continue to move higher in the future and outperform the market.

Stock

30-Day % Change

CAPS Rating (out of 5)

IDT

180.00%

*

Gevity HR

64.35%

**

Smith & Wesson

63.91%

****

Zion Oil & Gas (NYSE: ZN  )

58.44%

*

Sturm, Ruger (NYSE: RGR  )

51.02%

****

EnergySolutions

39.61%

****

DuPont Fabros Technology

38.00%

***

Rohm & Haas (NYSE: ROH  )

31.91%

**

iPCS

29.59%

*

Sigma Designs (Nasdaq: SIGM  )

27.95%

*****

Only two of the stocks here carry a top five-star rating. Let's see why the CAPS community thinks any of these, five-star or no, might outperform the market.

A mighty temblor
The on again-off again relationship between specialty chemical maker Rohm & Haas and Dow Chemical (NYSE: DOW  ) is on again, as the parties agreed to put their differences behind them and proceed with a merger. Actually, it was Dow that blinked, since it would have undoubtedly found itself in a difficult position if the court case had gone through to completion. Still, it comes out of this in a slightly better position as well.

Not only does it get to pay less of the tab in cash, but it also doesn't have to divest itself of its agricultural business, Dow AgroSciences, which is the sixth-largest player in the $48 billion agricultural chemicals industry. This is still a lesson in the bad economics at play in specialty chemicals, though Huntsman (NYSE: HUN  ) could have used some of the negotiation tactics in concluding a messy merger of its own that ultimately resulted in it staying independent. It let off Hexion and parent Apollo Management with a simple $1 billion payment despite having won court rulings that could have ended up forcing the merger's completion.

In its own case, Dow relented, agreeing to pay the original price of $78 a share. Add in the penalties for not consummating the marriage on schedule, and Rohm & Haas shareholders will walk away with almost $79 a share. To ante up its share of the purchase, Dow said it will use $10 billion of a $12.5 billion short-term bank loan, a $3 billion cash infusion from Berkshire Hathaway (NYSE: BRK-A  ) , and another $1 billion from the Kuwait Investment Authority. It also plans to sell off Rohm & Haas’ Morton Salt business afterwards to raise $4 billion more. Dow's dividend was dissolved in a vat of chemicals when it was slashed 64% to just $0.15 a share to finance the merger.

CAPS member TSIF was willing to speculate that a deal between the chemical giants would be reached, but felt that if something couldn't be worked out, Rohm & Haas' valuation was just not sustainable:

VERY speculative that they can settle their disagreement with DOW and get the $73 per share premium valuations. Without it Rohm and Haas's PE in the 20's is not sustainable. 12.5B instead of 13B doesn't help much if you are borrowing in this economy and you lost 80% of your market cap in the last 52 weeks.

Shake, rattle, and roll
These stocks have been shaking the market in the past month, and 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.

Berkshire Hathaway is a Motley Fool Inside Value and a Motley Fool Stock Advisor recommendation. Sigma Designs is a Motley Fool Rule Breakers selection. The Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletters today, free for 30 days.

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


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