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3 Stocks Stopping the Presses

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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:

Stock

CAPS Rating (out of 5)

Change Past Week

WebMD Health (Nasdaq: WBMD  ) ** (26.8%)
Hanwha SolarOne (Nasdaq: HSOL  ) ** 64.3%
Idenix Pharmaceuticals (Nasdaq: IDIX  ) * 104.5%

Source: Motley Fool CAPS, % Chg. from Jan. 6 to Jan. 13

72 inches down
Bad news comes in threes, they say, and that was certainly the case with WebMD Health, which reported (1) it was no longer looking to sell itself to the highest bidder; (2) its CEO resigned; and (3), its forecast for the coming year was pretty lousy as advertisers were cutting back even as its own expenses are climbing. Investors were on the wrong end of that triple play.

But the health information services provider is trying to turn the pharmaceutical industry's loss into its own gain. Currently WebMD relies upon the pharmas for its advertising, but also upon consumer product companies like Johnson & Johnson and Procter & Gamble, whose products relate to health conscious consumers. WebMD believes the patent cliff that's fast approaching for many of the industry's largest players, while a drain on its business in the short term, will eventually be a boon, as its pharma advertisers look for a cost-effective way to market products in a sea of generics and as a new wave of more targeted drugs gets approved. For now it will have to struggle along on its own and investors can only hope another suitor emerges for the business.

While Carl Icahn, who owns nearly 10% of the company, could always up and take the business private, lately he's had to defend his investment track record. Brian B. recently wrote that while Icahn is a reason not to go short on WebMD, there's no reason to go long.

Mr. Icahn as he's proven many times in the past that he has an eye for value and can unlock hidden shareholder wealth, but I don't quite see the catalyst in WBMD. Generally I don't invest in stocks when a senior manager has abruptly resigned, especially the CEO, as that's usually an ominous sign.

You can put WebMD Health on your watchlist to be alerted if some white knight comes riding to the health information specialist's rescue.

A break in the clouds
Much like the Cash for Clunkers program and the homeowners rebate program did previously here in the U.S., government subsidies to the solar industry pulled in a massive amount of sales in Germany in December. Yet, like those other handouts, it will cause a big hangover in 2012, because the sales weren't organic but rather timed to beat the subsidy-cut deadline. The biggest gainers were Jinko Solar and Hanwha SolarOne, which saw their stocks soar 40% and 37% respectively in one day on the news.

Yet there could be some additional modest recovery in the works as inventories were drawn down, leading the residential market in particular constrained regarding supply. In fact, one of the industry's biggest bears now sees an inflection point for solar shops. Axiom Capital Management analyst Gordon Johnson even raised his rating on First Solar (Nasdaq: FSLR  ) to neutral as a result of the improved situation. 

I'm not sold yet that this won't be just some transient gain for Hanwha, and I'm maintaining my underperform rating on CAPS. Add Hanwha to your watchlist and let us know in the comments section below or on the Hanwha SolarOne CAPS page if it will regain the hope that was previously lost to the hype.

The same, but different
With the merger of Bristol-Myers Squibb and Inhibitex all but a done deal, the hot spot of pharma remains hepatitis C formulations. No wonder investors have warmed up to Idenix Pharmaceuticals, as it reported positive interim data in a phase 2b study on its lead drug candidate IDX184, and is awaiting the green light from the FDA to remove its partial clinical hold. Investors no doubt think it's just a matter of time before someone steps forward to claim the tiny pharma as one of their own, following Pharmasset getting folded into Gilead Sciences (Nasdaq: GILD  ) and Roche buying Anadys.

CAPS member getrichslowfool expects a deal to happen sooner rather than later, but All-Star quinpeung says betting on an acquisition is just a speculative venture and he's not sure it will happen. Add the stock to the Fools' free portfolio tracker and see whether an offer ever materializes.

Read all about it!
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The Steve Jobs Betrayal
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Fool contributor Rich Duprey holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Johnson & Johnson and First Solar. Motley Fool newsletter services have recommended buying shares of Gilead Sciences, Procter & Gamble, Johnson & Johnson, and First Solar. Motley Fool newsletter services have recommended creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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Related Tickers

5/25/2012 4:00 PM
WBMD $22.65 Up +0.44 +1.98%
WebMD Health Corp. CAPS Rating: **
IDIX $9.68 Down -0.40 -3.97%
Idenix Pharmaceuti… CAPS Rating: **
HSOL $0.95 Up +0.01 +1.06%
Hanwha SolarOne Co… CAPS Rating: *
GILD $50.49 Down -0.13 -0.26%
Gilead Sciences CAPS Rating: ****
FSLR $14.33 Up +0.11 +0.77%
First Solar CAPS Rating: **

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