Whoa! What Just Happened to My Stock?

Resist the urge to high-five everyone in the cubicles next to you. Your stock may have just strapped on a rocket pack and taken off for the moon, but smart investors won't celebrate until they know that upward leap was justified. Without a fundamental basis for the bounce, these stocks can quickly make the return trip down.

Is now the time to lock in profits, or is this just the first step toward even higher valuations down the road? Let's examine several stocks that just hit the afterburners and see whether they're truly headed into orbit.

The Dow Jones index dropped 115 points, or 1%, on Friday as worries about Greek austerity plans remained topmost in traders' minds. So stocks that went significantly higher are pretty big deals.

Waiting for the last minute
While many investors were looking to get out of the market in a big way on Friday, someone was looking to get into stem-cell researcher Neostem in a big way and a big hurry. The stock, which had traded fairly flat all day long, suddenly surged 23% higher in the closing minutes of trading. There was nothing to account for the big interest in the company; others in the space, including Pluristem Therapeutics (Nasdaq: PSTI) and Geron (Nasdaq: GERN), were off for the day.

Perhaps someone attending an investor conference the day before liked what he or she saw. Neostem did participate in a gathering of emerging health-care and life-science companies on Thursday that featured venture and business development executives.

Or maybe our investor liked it that Neostem was doing "God's work." In a historic if somewhat strange collaboration, the stem-cell specialist has teamed up with the Vatican to expand research and raise awareness of adult stem-cell therapies. The Pontifical Council for Culture has pledged $1 million for the purpose. Neostem focuses on a proprietary population of adult stem cells known as very small embryonic-like stem cells, or VSEL. Although they're adult stem cells, they have characteristics of embryonic ones, making engraftment faster, safer, and cheaper.

CAPS member shamapant likes Neostem's push into China, believing it gives investors confidence to tap into the market there: "Extreme Growth Stock, revenue growth above 300%, has multiple sources of revenue and is growing in every branch of business. Expanded into China yet based in the US providing best options for growth with investor confidence in its financial ethos."

Share your opinion on the Neostem CAPS page and follow its progress by adding it to the Fool's free portfolio tracker.

Gotta go!
Nymox Pharmaceuticals was another biotech making a big move at the end of the day with no specific news to account for it. Yet it's not unaccustomed to making such big jumps. Late last year, it nearly doubled in price after an Italian drug company agreed to develop and market its enlarged-prostrate treatment, NX-1207, in Europe, the Middle East, and parts of Africa.

Compared with a placebo in phase 3 trials, the drug reduced a patients' urgency to urinate by 52% after three months. But Pfizer (NYSE: PFE), Abbott Labs (NYSE: ABT), and GlaxoSmithKline all manufacture competing therapies that that might prove difficult for the biotech to surmount.

Highly rated CAPS All-Star zzlangerhans remains skeptical of Nymox's progress, since the company plays things very close to the vest: "NX-1207 is currently in a phase III trial for BPH but no one knows how far Nymox has progressed with enrollment, or when topline data can be expected, because the company has refused to divulge this information. Again, most other similar companies keep their investors updated on these material developments."

Add Nymox to your watchlist to keep tabs on who thinks these well-guarded secrets are worth investing in.

Climbing out of the ditch
Chinese auto-parts seller China Automotive Systems did the opposite of the other two big movers last Friday by moving up early and then staying at that elevated level throughout the day. As with the other two, however, there was no specific news to cause the big bump in value. But it's not as if China Automotive didn't need it.

Like many small-cap Chinese RTO stocks, the auto-parts specialist has been operating under a cloud of suspicion, and its stock is still down more than 58% from its 52-week high, even after the jump last week. Chinese parts makers were dumped after China eliminated the tax breaks that buyers of small cars enjoyed, all while reimposing a 10% tax.

It didn't help that Wonder Auto Technology stopped trading because of problems with its financials. SORL Auto Parts is also down 62% from recent highs.

Yet 85% of CAPS members rating China Automotive believe it can still outperform the broad market averages. Add the stock to the Fool's free portfolio tracker to keep track of whether it can get its engines going again.

Going into orbit
That's why it pays to start your own research on these stocks on Motley Fool CAPS, where you can read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from the stock's CAPS page. Then you can decide for yourself whether your stock's headed for re-entry or off to infinity and beyond.