Some stocks are one-hit wonders, making a big splash when they first appear, then quickly fizzling into obscurity or oblivion. But for other stocks, that initial big move is only a preview of even bigger and better gains to come.
Today, we've listed three stocks that made some of the biggest upward moves over the past month, despite the incredible volatility in the market, which we'll pair with the ratings issued by our Motley Fool CAPS community. The higher each stock's rating, the greater CAPS members' faith in that company's ability to keep on beating the market.
(out of 5)
|AMR (NYSE: AMR )
|Martha Stewart Living Omnimedia (NYSE: MSO )
|Frontline (NYSE: FRO )
Source: FinViz.com. ^From Nov. 29 to Dec. 29.
A mighty temblor
American Airlines parent AMR had clawed back a small fraction of what it lost after filing for bankruptcy protection Nov. 29, but that all fell apart as the New York Stock Exchange recently announced it will delist its shares come Jan. 5. The stock lost more than a third of its value upon the news last week and has continued to slide into the new year.
No doubt delisting is a big deal, but it's its business that's the real concern. The International Air Transport Association said global air travel rose 4.3% in November, but that was masked by an exceptionally weak year-ago period. Demand is actually much worse than what the numbers show, with American's legacy carrier peers putting in poor showings even among soft comps. Delta Air Lines (NYSE: DAL ) saw November traffic drop 1.9% while the combined traffic numbers for United Continental (NYSE: UAL ) were down 3.6%. Unlike its legacy carrier competitors, JetBlue Airways was a different story, seeing a 10.9% increase in traffic.
As CAPS member pchop123 notes, the skies are "not always friendly," and American's own traffic numbers were down 1.7% in November as it continued to reduce capacity. Since there's no runway left for American to take off on a major exchange, tell us on the AMR CAPS page or in the comments section below if you think it will ever gain altitude again, then add the airline to your watchlist to see what happens.
A marriage and a divorce
Domestic diva Martha Stewart Living Omnimedia got a nice early Christmas present when J.C. Penney took a 17% stake in the multimedia company, paying $38.5 million for 11 million shares and two seats on the board of directors. Then Martha Stewart Living Omnimedia's investment in wedding website WeddingWire netted a neat 120% profit after it sold its 40% stake to a private equity firm for $11 million, proceeds from which it will use to pay down its remaining $6 million in debt for having purchased the businesses of chef Emeril Lagasse. Bam!
Essentially, Martha Stewart is honing its business with what it does best, and J.C. Penney is hoping to capitalize on that by opening stores-within-stores throughout its chain over the course of its 10-year agreement.
Although the broader CAPS community is somewhat supportive of Martha making it big again, with almost two-thirds of those with an opinion thinking it will beat the Street, All-Stars are more circumspect, with just over 50% seeing it the same way. Monitor Martha by adding her stock to the Fool's free portfolio tracker, which will keep you updated on its progress.
Whatever floats your boat
Although it looked like tanker giant Frontline was going to sink beneath the waves as it ran out of cash, possibly taking others like Ship Finance International down with it, the shipping company announced a restructuring earlier this month that will allow it to sail the Seven Seas awhile longer.
It will remove the most burdensome debt on its books and transfer it to a new company imaginatively called Frontline 2012 with Frontline's chairman and CEO putting up $505 million in guarantees to make the deal float.
The new company will acquire 15 contracts and tankers from Frontline, along with $666 million in debt, while assuming $325 million in obligations to pay for the vessels. The deal shows just how precarious and dire the tanker operator's financial condition was. But now it ought to be able to ride out the storm that has sent several shipping companies to Davy Jones' locker.
CAPS member eleev is confident Frontline will keep its head above water and, as it still pays a dividend, is willing to wait for the recovery: "one of largest shipping companies. With economy picking up, fro should improve and pay a good dividend."
Add Frontline to your watchlist and tell us on the Frontline CAPS page if you think it will make it to safe harbor.
Shake, rattle, and roll
These three stocks shook the market this past month, but the Fool has found one company that's digging up massive profits and is likely to continue to do so if the markets become rattled. Roll on over to get your free copy, but hurry, because it's available only for a limited time.