Last month, I gave you six stocks that I thought could double by the end of August. The article elicited a number of responses, both positive and negative. Now that we're halfway though that timeline, let's see how those picks are doing.
Why these stocks are potential winners
As you'll recall, my argument was based on two things I learned from Fool co-founder David Gardner: that innovation wins out, and that heavily shorted stocks can jump on any sign of good news. That's certainly been the case for Green Mountain Coffee Roasters, which has jumped another 16% since the beginning of July on another blowout earnings quarter.
So I went ahead and looked for companies that shared some of the same characteristics today that Green Mountain had then. Here's how they have done, and keep in mind while viewing this that, over the course of the past month, the S&P 500 is down slightly.
Price June 30, 2011
Price July 29, 2011
|Entropic (Nasdaq: ENTR )||$8.89||$6.68||(25%)|
|SodaStream (Nasdaq: SODA )||$60.81||$73.35||21%|
|Ebix (Nasdaq: EBIX )||$19.05||$19.69||3%|
|First Solar (Nasdaq: FSLR )||$132.27||$118.23||(11%)|
|Travelzoo (Nasdaq: TZOO )||$64.64||$52.80||(18%)|
|Coinstar (Nasdaq: CSTR )||$54.54||$48.86||(10%)|
Source: Yahoo! Finance.
Entropic's devices allow consumers to easily connect their electronic devices to one another and the Internet. Analysts at DisplaySearch expect that today's count of TVs connected to the Internet, estimated at 60 million, could balloon all the way to 500 million by 2015. The company will be coming out with its second-quarter earnings on Wednesday, so if any big moves are going to happen, they will likely occur around then.
SodaStream investors must wait until Aug. 11 for the company's earnings to come out. The company, which hopes to do to soda what Green Mountain did for coffee, has done quite well over the past month. This is due both to the fact that it has recently seen its price targets raised by analysts, and because investors may be viewing Green Mountain's positive earnings release as a bellwether for things to come for SodaStream. We'll see in a few weeks.
Ebix also joins the list of yet-to-announce-earnings group. The company has had a ho-hum month so far. If you'd like to get the inside scoop on Ebix before its Aug. 9 earnings release, our Motley Fool staff just published an exclusive interview they conducted with Ebix CEO Robin Raina.
Showing how busy the first two weeks will be, First Solar will be coming out with its earnings release on Thursday. If you'd like to get a view of the solar industry from 50,000 feet, the Fool's Reza Handley-Namavar recently offered thoughts on what's up with solar.
Finally, to some companies that have already announced earnings: Travelzoo and Coinstar. Travelzoo missed on both the top and bottom lines, disappointing investors and creating a feeding frenzy for short-sellers. That being said, the company managed to grow revenue 34% and earnings by 51%.
Coinstar, which operates the Redbox movie kiosks, has suffered two setbacks over the course of the past month. First, it announced the resignation of the head of its Redbox division, then it disappointed investors on its conference call this week by failing once again to offer any insight into its attempt to enter the digital streaming realm.
A final word about Foolish investing
It would be easy to read my earlier article as a "get rich quick" scheme; I fully understand that opinion. However, my larger point is this: Innovative companies will be labeled overpriced for years before others wake up to their story. I think all of these companies are innovative in their own right; some will work out and some won't. Those decisions shouldn't be made on earnings statements alone, but on the overall fundamentals of the company.
To show that I put my money where my mouth is, I owned several shares of Travelzoo before their recent tumble, and I plan on adding to those shares as soon as I'm permitted to.
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