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
|Complete Production Services (NYSE: CPX )||****||67.5%|
|Focus Media (Nasdaq: FMCN )||***||46.2%|
|Clearwire (Nasdaq: CLWR )||**||(47.5%)|
Source: Motley Fool CAPS, % change from Sept 9. to Sept. 16.
A BOGO sale
Investors got excited when Superior Energy (NYSE: SPN ) announced it was buying oil-services specialist Complete Production Services for $2.7 billion. Well, Complete Production investors were ebullient; Superior investors, not so much. Its shares tumbled 14%.
Despite environmentalist concerns over hydraulic fracturing, or fracking as it's known, demand for such services grew hot as relatively new technologies and processes such as horizontal drilling helped spur plentiful supplies. Natural-gas prices, though, have remained low as a result.
The combined company, which will go by the Superior name, still won't be as large as giants Halliburton and Schlumberger, but Complete Production's fracking expertise can be exported around the world through Superior's international operations.
CAPS member rcjansen figured Complete was too cheap a month ago and thought the industry outlook was promising: "This stock has been oversold. It is a US oil services provider that should do well over the short term and long term."
A crude assessment
Chinese advertising specialist Focus Media Holding got a rise after increasing the limit of its buyback program from $450 million to $650 million. Buybacks can be a bullish signal from management -- Warren Buffett thinks Berkshire Hathaway (NYSE: BRK-B ) shares are the cheapest they've ever been, so he's buying back shares for the first time ever -- but too often managers simply end up buying high and selling low. Just before the market crashed into the Great Recession, company share-repurchase programs hit an all-time high.
With 96% of the CAPS community who've rated Focus Media thinking it can beat the market averages, it's apparent they think the media outfit is ripe for growth, so it just might be as a good value as management says. Tell us in the comments section below or on the Focus Media CAPS page whether you think the buyback is good news, and add it to your watchlist to see whether it pays off.
The writing was on the wall for Clearwire investors if they'd chosen to read it. When Sprint Nextel (NYSE: S ) decided to add LTE technology to Clearwire's WiMax offerings, it was obvious Sprint was following the lead of Verizon and AT&T and moving toward the tech that had a growing critical mass. Its decision on Friday to virtually abandon WiMax was simply the next logical step.
Highly rated CAPS All-Star TSIF thinks there's still an element of opportunity for Clearwire and its investors, but after losing its primary means of financing (Sprint accounted for 40% of its revenues and owns half of its stock), he has a hard time thinking it can be successful.
I don't believe Sprint can exist without Clearwire for several years at least and Clearwire will benefit from additional bandwidth loading of the iPhone. Clearwire is working on an upgrade plan of [its] own. If Clearwire was more profitable and Sprint less reliable on [its] business plan this might be a buying opportunity for Clearwire, but Clearwire already appeared excessively valued before Sprint tossed them under a bus. It might be that Sprint is hoping to buy more Clearwire at a discount price, but I can't give them credit for being that smart, even if it is a devious sort of Smart. If so, It could be that Sprint values Clearwire's spetrum more than the infrastructure.
Although 83% of the CAPS members thought Clearwire still had a chance to connect, the low two-star rating they assigned it suggests that they believed there were better places for your money. Dial into other opinions on the Clearwire CAPS page. Then put your feet up and add the stock to the Fool's free portfolio tracker to keep track of its progress.