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Some stocks are one-hit wonders that make a big splash when they first appear and then quickly fizzle into obscurity or oblivion. But for other stocks, that initial big move is only a preview for even bigger and better gains to come.
Today, we've listed three stocks that made some of the biggest upward moves over the past month, and we'll pair them with the ratings issued by our Motley Fool CAPS community. The higher each stock's rating, the greater CAPS members' faith in that company's ability to keep on beating the market.
1-Month % Change
CAPS Rating (out of 5)
|Silicon Motion Technology (Nasdaq: SIMO )||
|Glu Mobile (Nasdaq: GLUU )||
|Gramercy Capital (NYSE: GKK )||
1-Month % Change from Nov. 17 to Dec. 17.
While you were out, the market surpassed the 12,000 level, a threshold it hasn't seen since early 2008. So before we get shaken out again, let's see why the CAPS community thinks some of these companies might continue to outperform the market.
A mighty temblor
Analysts took one look at Silicon Motion Technology's fourth-quarter results the other day and flipped the switch on some bullish sentiments. They see the burgeoning demand in mobile computing creating a similar uptake for Silicon's controllers, which they suggest offer a 12- to 18-month lead over the competition.
Mobile storage for NAND-type flash memory provides by Micron Technology (NYSE: MU ) and Samsung is proliferating as tablet computers and smartphones soak up supply. The iPad started the tablet surge, but Motorola Mobility, Hewlett-Packard (NYSE: HPQ ) , Acer, Asus, and others are bringing a number of models to market. The greater the supply of NAND flash there is in the market, the more Silicon Motion's flash controllers will be needed.
CAPS member kathpdx says that with the industry still in the early innings of this game, the controller maker is poised to profit. Feel free to offer up your own views on the Silicon Motion Technology CAPS page.
A sticky situation
Mobile communications is also driving Glu Mobile to new heights. The mobile-phone game developer created quite a stir at the Consumer Electronics Show last month, when it said it signed an agreement with NVIDIA (Nasdaq: NVDA ) to develop games for the Android platform. The stock surged higher on the news, but all too predictably it announced that it was making a secondary stock offering at a significant discount to the price that shares were trading at.
The problem I see is its business model. It switched from selling its games to giving them away but offering in-game transactions. Although Electronic Arts (Nasdaq: ERTS ) sees such microtransactions as a growth opportunity, there's also a lot of resentment from players for being nickeled-and-dimed every time they want to cast a spell or empty a clip at an enemy. Actually, if we were talking about just five or 10 cents, the players might not mind, but there have been some spectacular blunders by game companies that sought to surreptitiously extract several dollars a month from gamers through their cash shops.
Perfect World uses the same model but nevertheless sees a declining subscriber base, even as revenue per subscriber goes up. Unless you find the perfect game to attract players, you're going to be in for a world of hurt, and Glu is on that path, with revenues down by 18% and guidance equally dismal.
CAPS member Hollow Mountain hopes that gaining access to the Android market will be enough to sustain the game maker.
This company has grown quickly. Forward guidance is key though, and they just hit a home run by getting into the Android and tablet markets to go along with the iphone app store. Look for more double-digit growth on this one.
A house, a shambles
Commercial real-estate finance and property-investment company Gramercy Capital has been getting its financial house in order by selling off some investments that has put cash in its pocket, deleveraged its balance sheet, and boosted liquidity. The anticipated collapse of the CRE market never materialized, and there's hope that we've managed to dodge a bullet on this one.
CAPS member 2good2betrue was confident of having hit a good enough entry price but figured it would take time for the purchase to pay off. No doubt our participant was surprised that Gramercy's stock continues to go up and up.
I've been on the look out for a play in the real estate business with some upside and dividend potential. Came across GKK and have been tracking for a while and wanted to load up if it got under $3. This is probably close enough. ... Near term I'm not expecting much of any gain, but by next year you won't be able to touch this price.
Be sure to add the REIT to the Fool's free portfolio tracker, and then head over to the Gramercy Capital CAPS page and add your own thoughts on whether it will continue to benefit from such good fortune.
Shake, rattle, and roll
With these stocks shaking the market this past month, 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.