3 Stocks Stopping the Presses

You saw the headlines. You know your stock price made a big move. But what does that portend for your investment's future?

By pairing the latest news with the collective wisdom of our 170,000-strong Motley Fool CAPS investing community, we might be able to discover whether your stock's latest exploits are a short-term hiccup or the start of a much bigger trend.

The following stocks have all made big moves over the past five days.

Stock

CAPS Rating (out of 5)

Change Past Week

Cell Therapeutics (Nasdaq: CTICD  )

**

31.0%

Cheniere Energy (NYSE: LNG  )

*

51.0%

Sigma Designs (Nasdaq: SIGM  )

**

(26.2%)

Source: Motley Fool CAPS; % change May 11-18.

Can't fight this fire
See that "D" at the end of Cell Therapeutics' ticker? That stands for "new issue," and though it will go away, it was assigned because the biotech effected a 1-to-6 reverse stock split as a means of remaining in compliance with Nasdaq listing requirements.

Struck down by the FDA over approval for its cancer drug Pixuvri, Cell Therapeutics shot back up after announcing a licensing deal for its cancer therapy Tosedostat. The roller coaster ride headed back down again, when the FDA again rejected its drug pixantrone. Cell Therapeutics is in crisis mode, which means you can safely ignore the biotech's claim that it will be resubmitting pixantrone to the agency yet again later this year. Third time might be the charm, but "three strikes and you're out" also comes to mind.

And even if the FDA does miraculously agree to approve the drug, pixantrone will face stiff competition from Biogen Idec's (Nasdaq: BIIB  )  Rixutan and Spectrum Pharmaceutical's  (Nasdaq: SPPI  )  Zevalin.

Although it's surprising that nearly 90% of CAPS members rating Cell Therapeutics think that it might be able to beat the broad market averages, the two-star rating they've assigned suggests that they correctly think there were better and safer places for your money.

Now that it has a new lease on life courtesy of the reverse split, head over to the Cell Therapeutics CAPS page and let us know whether you think bad news comes in threes.

Going nowhere?
Fresh off getting approved to become the first exporter of liquid natural gas in more than 40 years, Cheniere Energy said it wanted to take a stake in a Lithuanian terminal. The government approved Cheniere's export request, giving its Sabine Pass terminal in Louisiana the ability to export worldwide up to 803 billion cubic feet of natural gas each year. Lithuania happens to be one of export sites, and the government there says it would accept as much as a 20% investment in the terminal if it was offered, allowing it to supply Lithuania with up to 2 billion cubic meters of gas per year.

As positive as the results seem, not everyone is sold on Cheniere as a good investment yet -- both terminals, for example, still need to be built. Still, some analysts think Cheniere can export liquefied natural gas to Europe more efficiently than new terminals in Australia can. Currently, LNG projects down under consist of two major ventures -- the North West Shelf, operated by Woodside Energy, and the Darwin, a joint venture between Bechtel and ConocoPhillips (NYSE: COP  ) . The majority of Australia's LNG exports -- fully two-thirds -- goes to Japan.

With 82% of CAPS members saying Cheniere can beat the Street, it's tempting to give the company a pass. But like Cell Therapeutics, its low CAPS rating is a warning sign. Let us know in the comments section below whether you think the Cheniere can export its stock to a higher level.

Chipping away at value
For chip designer Sigma Designs, turning revenues into profits has proved as difficult as spinning straw into gold. The promises of better times ahead seem just as ephemeral, too. Last year, it was able to generate $1.1 million in net income, or $0.04 per share, but this year's effort was a bust, as Sigma lost $5.4 million, or $0.18 per share.

Management was "disappointed," to say nothing of the market, but they're looking for the rest of the year to turn around. Analysts, investors, and the market really shouldn't have been so surprised by the developments, though. We knew early on that the first half of the year was going to be soft, and Sigma was already saying to expect the back half of the year to be better, so dropping the stock as much as it did suggests an overreaction.

Sigma has plenty of opportunities before it, including IPTV box designs and deals with Motorola Mobility (NYSE: MMI  ) and Cisco. Highly rated CAPS All-Star Calinvestments is looking for a new bull market to pull Sigma ahead: "This is a small/mid cap high growth stock that should outperform the S&P during the bull market."

Add Sigma Designs to your watchlist to see whether it can design a new growth story.

Motley Fool newsletter services have recommended buying shares of Cisco Systems. 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.

Fool contributor Rich Duprey owns shares of Motorola Mobility and Cisco but has no financial position in any of the other stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.


Read/Post Comments (7) | Recommend This Article (6)

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 May 30, 2011, at 5:31 PM, ltldab wrote:

    Some years ago I remember that a large bank was supporting LNG in it's exporting/importing business, and the stock was at $4.00. There are surely more people/businesses that will either buy or support LNG in it's quest to become an export and or import gas business.

  • Report this Comment On May 30, 2011, at 5:59 PM, oracleatdelphi66 wrote:

    Cell Therapeutics WILL re-submit for pixantrone approval. As announced by the FDA's office of New Drugs, it could not conclude that the pixantrone 301 trial had failed, and based on re-submission of new data, acclerated approval based on 301 is still possible.

    Also, there are currently no approved therapies in the third line patient group the pixantrone NDA was submitted for.

    Dan Eramian, CTI

  • Report this Comment On May 30, 2011, at 6:31 PM, ptish wrote:

    I think some of these financial adviers should do research behind the mechanisms of the drug and the pathways it targets before saying what will face stiff competition.

  • Report this Comment On May 31, 2011, at 8:49 AM, jonesnj0 wrote:

    More Bashing I see!

    will you ever stop!

    Your short buddies that you bash for will soon pay and pay Big!

    Pix has a 24% C/R rate a 65% S/R the fda admitted they dropped the ball,!

    Pazdur was the one maily respoucible for the ODAC vote there also was no reason for him to even be at the ODAC meeting There were 97 million shorts shares in at the time when this less than a human being sabotaged The Drug by falsely claiming the trial was a failure!

    Now the FDA states that in fact the trial was not a failure!

    Pixantrone has also beat Doxuribucin as you know Dox is the #1 Chemo Drug in the world!

    Why Bash a drug that has been shown to be superior to all other Chemo Drugs to date?

    Unless of course you have an alterior motive!

    Don't be Surprised if Pixantrone passes by the end of the year or sooner!

    The Eu could pass the drug at anytime!

    ignore mootlyfools as they apparently are connected to the shorts in the stock 57 million shares pre R/S!

    You Now have Zero credibility!

  • Report this Comment On May 31, 2011, at 10:28 AM, oracleatdelphi66 wrote:

    We find your recollection of the facts quite inaccurate. CTI received a complete response letter (CRL) from the Office of Oncology Drug Products (OODP) in April 2010. The stock price during that period was approximately $2.16 on a post split adjusted basis. The Tosedostat license agreement announcement was almost 12 months later in March 2011 at which point the stock was trading at post split adjusted price of $2.22. Not sure what roller coasters you ride on but a 3% change in stock price doesn’t support the slant in your article.

    It is also inaccurate to say the FDA “again” rejected its drug pixantrone. This just serves as an attempt to persuade your readers away from CTIC when in fact you could not be more wrong in your assertion. The Company appealed the basis for the CRL presenting evidence based arguments to the Office of New Drugs in March 2011 noting that the application of an interim statistical threshold to the PIX301 pivotal study was unwarranted and as such PIX301 was a successful trial meeting its primary and secondary endpoints. OND agreed with the arguments the Company made in its appeal and has provided the Company the opportunity to submit 2 pieces of information, data demonstrating when the Company became un-blinded to treatment assignment and a 2nd independent radiographic evaluation of the response and progression data. With these acceptable data the OND would conclude that PIX 301 was successful and that accelerated approval was not outside of reach with this single pivotal trial. This is the information we are submitting which will validate the reliability of the PIX301 results as the potential basis for accelerated approval – so it is not third time is a charm but rather clarify these two issues satisfactorily and the trial will be deemed successful and eligible for accelerated approval.

    As for the competition with Zevalin or rituximab, we would like to point out that neither have an FDA approved label indication for the patient population pixantrone is seeking approval

    James Bianco

    CEO, CTI

  • Report this Comment On May 31, 2011, at 1:35 PM, beachboy25 wrote:

    Once again you got your facts wrong and have included a large number of inaccuracies and misspellings in your piece. It’s spelled Rituxan, not Rixutan, and you neglected again to mention that GlaxoSmithKline also has a lymphoma drug called Bexxar that works as well as Spectrum’s Zevalin. Also, CTI's Pixantrone is not dead. Do your homework. Do you have editors? Do you ever check your facts?

    Jamie Reno

  • Report this Comment On May 31, 2011, at 2:07 PM, jonesnj0 wrote:

    Jim Good Piece of info!

    thank you for posting it!

    I believe they have an agenda, and really

    why bother with facts?

    Just mislead Investors and steer them away from a Good company with an outstanding Pipe line and

    strong approval candidate!

    Guys Google Pixantrone trials!

    The real truth is there!

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