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 180,000-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 trading days:
CAPS Rating (out of 5)
Change Past Week
|ProShares Ultra Silver (NYSE: AGQ )||**||(40.9%)|
|Barnes & Noble (NYSE: BKS )||*||16.0%|
|MannKind (Nasdaq: MNKD )||**||13.2%|
Source: Motley Fool CAPS, % change from Sept. 20 to Sept. 27.
A BOGO sale
With silver prices down to around $30 an ounce, there's no wonder ProShares Ultra Silver was down big, too. As an ETF that attempts to juice its returns by investing in swap agreements, futures contracts, and other complex financial instruments to obtain double the performance of silver, it will be more volatile than the metal itself.
Silver itself has fallen only about 22% over the past month, but the ETF is down 46% in the same time period. Many silver miners and streamers have fared somewhat better, with Silver Wheaton (NYSE: SLW ) down 16%, Pan American Silver off 12%, and Silvercorp Metals (NYSE: SVM ) down just 5%.
Despite the drop in the ETF's share price, ProShares will be splitting the stock 2-to-1 on Oct. 13, probably as a move to increase liquidity and open up the ETF to more investors who might be put off buying a triple-digit stock.
Regular stock splits are often considered a bullish sign despite having no effect on a stock's true value, but there's no underlying "business" for which an ETF split could be seen as a growth marker. Since the ETF is tracking the price of silver bullion and using sophisticated financial strategies to optimize returns, the split is merely a manipulative maneuver and shouldn't be seen as anything more than that.
CAPS member 1cvallejo sums up the ETF's outlook this way: "Leverage is the worst thing to happen to this stock in the recent past; soon enough it will be the best."
Follow the ETF by adding ProShares Ultra Silver to your watchlist and see whether it will be worth twice the value at half the price.
Read all about it!
As difficult as the bookselling business is, Barnes & Noble is hanging on, outlasting rival Borders, which closed its last stores on Sunday. Somewhat ironically, it is in no small part due to a non-book investment, its Nook e-reader, that has allowed B&N to survive, as well as through the support of rich friends like Liberty Media, which invested $204 million in it after scrapping a $1 billion buyout last month.
So Barnes & Noble finds itself in a better position now, having won Borders' trademarks and intellectual property, including its 48 million-member customer database, at auction two weeks ago for which it paid less than $14 million. Its Nook is also popular, though competition from Amazon.com's (Nasdaq: AMZN ) Kindle has largely overshadowed it. In short, there could still be a happy ending for B&N investors.
Yet CAPS All-Star naughtyguy highlights a problem that has plagued other retailers:
Walked through one of their newer stores. A fair amount of customers were in the store, but only one or two at the registers! I found two books I might want and will get them on Amazon.
Consumers are using bricks-and-mortar stores as a window-shopping exercise and then buying the item online, usually for less. But you can tell us on the Barnes & Noble CAPS page whether its story is still a page-turner and then add the bookseller to the Fool's free portfolio tracker and see whether it can become a best-seller.
Take a deep breath
Investors liked MannKind's $370 million debt-financing plan after the FDA gave the company the go-ahead for two clinical studies of its inhaled insulin therapy Afrezza, but with the difficult road the treatment has had in getting to this point and the amount of debt MannKind will be forced to carry as a result of the financing plan, the decision is fraught with a lot of risk.
MannKind's trials will be studying the safety and efficacy of Afrezza, no small achievement considering the high-profile flameout of Pfizer's (NYSE: PFE ) Exubera that left many figuring the inhaled-insulin path was a dead end.
With 83% of CAPS members still rating the biopharmaceutical to outperform the market averages, it's clear they think there's still promise in the road MannKind has chosen. Add its stock to your watchlist and tell us on the MannKind CAPS page whether you think it will succeed this time around.