5 Stocks That Could Make Huge Moves

Be forewarned, this article isn't for the faint of heart. I'm going to be introducing five stocks that could make huge moves during this earnings season.

But whether those moves are up or down is hard to tell. You see, the reason these stocks are liable to make such moves is because they are heavily shorted. Major news announcements usually have an exaggerated effect on heavily shorted stocks, and earnings announcements definitely qualify as a "major announcement."

In reality, no one can tell with 100% certainty which way these stocks will go. I'll let you know what to look out for, and at the end, I'll offer you access to a special free report on five stocks our analysts think you need to keep an eye on this earnings season.

Company

% of Float Short

Earnings Date

Expected Revenue

Expected EPS

MAKO Surgical (Nasdaq: MAKO  )  32%  May 7 $23.7 million ($0.20)
ATP Oil & Gas (Nasdaq: ATPG  )  42%  May 9* $178 million ($0.35)
Renren (NYSE: RENN  )  72%  June 20* $29.9 million ($0.04)
ZAGG (Nasdaq: ZAGG  )  45%  May 3 $52.0 million $0.14
SodaStream (Nasdaq: SODA  )  72%  May 18* 56.9 million euros 0.36 euros

Sources: E*TRADE, company news releases, and finviz.com. *Earnings date not yet announced; given date is when first-quarter results were released last year.

Fools have lots of confidence in these two
As far as feelings within the broader Foolish community go, both MAKO and SodaStream seem to be favorites to prove the bears wrong.

MAKO, the maker of the RIO System for robotic hip and knee replacements, has a coveted four-star rating from our CAPS community. And there are plenty of reasons to be excited. While shorts are concerned about MAKO's lack of profitability thus far, the company's product has one undeniable trend pushing it forward: an aging demographic with an obesity problem that wants to stay active.

SodaStream, on the other hand, may only have a two-star rating in CAPS, as short-sellers don't believe the company's at-home soda makers are more than just a passing fad. But with strong sales appreciation, backed up with a new system that can purify your water, heat it, cool it, or carbonate it, I wouldn't pit my money against this company.

Be careful with these two...
ZAGG is probably best known for the accessories it offers to iPhone users. Though customers may enjoy what ZAGG has to offer, investors aren't so hot on the stock: It has the lowest rating possible in CAPS, one star. ZAGG's $50 million acquisition of iFrogz was a questionable long-term move, and its brand -- which is incredibly important in this field -- still isn't that strong.

Renren -- dubbed the "Facebook of China" -- is another Fool un-favorite, as it too has a one-star rating. Renren faces stiff in-country competition from Tencent, has a confusing corporate structure, and will always be at the mercy of a somewhat unfriendly Chinese government. Should the company become the leading social networker in China, demonstrate shareholder-friendly policies, and avoid the ire of Beijing, it could be a big winner. But for now, there are still lots of question marks.

Sitting on the fence
Finally, we have ATP Oil & Gas, for which both bulls and bears have convincing arguments. While the company is heavily shorted, it enjoys a four-star rating among our community members. Bulls believe that with oil prices rising and reserves waiting to be extracted from the Gulf of Mexico, the company stands to make a killing.

At the same time, the company doesn't have the cleanest balance sheet, and is undergoing a secondary offering on the market to raise money -- which is rarely ideal for existing shareholders. Time will tell how this story plays out.

Where to look this earnings season
Now that you have a better view of five stocks that could be making big moves this earnings season, I suggest you continue your research. Earnings season is a crucial time for every investor to take the pulse of companies on his or her watchlist.

Here at The Motley Fool, we've put together a special guide: "5 Stocks Investors Need to Watch This Earnings Season." The report will give you insights into how to play this pivotal time in the year, but get your copy before its too late, absolutely free!

Fool contributor Brian Stoffel owns shares of MAKO Surgical. You can follow him on Twitter, where he goes by TMFStoffel.

The Motley Fool owns shares of MAKO Surgical and SodaStream. Motley Fool newsletter services have recommended buying shares of MAKO Surgical and SodaStream, as well as writing naked calls on ZAGG. The Motley Fool has a disclosure policy.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (15) | Recommend This Article (72)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 20, 2012, at 5:21 PM, tkell31 wrote:

    ATPG was a Fools best bet a couple of years ago...of course back then it was trading at 17-18 a share. This site is aptly named, bad advice from fools for fools.

  • Report this Comment On April 20, 2012, at 5:39 PM, noggenfloggen wrote:

    but oil is not rising

  • Report this Comment On April 20, 2012, at 6:01 PM, TMFCheesehead wrote:

    tkell31-

    I looked at our premium service picks, and it seems that none have selected ATPG in the past.

    If it was an individual writer for Fool.com that was speaking bullishly of ATPG, I'd argue that that's a great sign. The Fool encourages a lively debate surrounding stocks, and that means it'll be difficult to find any company upon which every Fool writer can agree would be a good investment.

    Remember, if you get 40% of your stock picks wrong, you're likely doing a GREAT job of investing.

    Brian Stoffel

  • Report this Comment On April 20, 2012, at 6:11 PM, EnigmaDude wrote:

    If you get 40% wrong, then you should have 3 of your 5 picks right. If I were to pick 3 from your list of 5 it would be SODA, MAKO, and ZAGG (not necessarily in that order).

    I'm not convinced that ATPG is a good pick either and for a Chinese stock I like NTES. They could be the Chinese version of Apple.

  • Report this Comment On April 20, 2012, at 8:16 PM, Passingass wrote:

    Earning, so far I've picked KO, MSFT, INTC & POOL. KO had the cheapest option and I made the largest spread from KO. INTC looked good except forward guidance spread. Do something in one hand and wish in the other. Keep on writing!!

    Remember China is still Communist and can make that number whatever they want too.

  • Report this Comment On April 21, 2012, at 11:27 AM, lovesstocks2 wrote:

    As of right now ATPG is not undergoing a secondary offering. They have always kept a shelf registration active in case conditions are favorable for an offering but as of right now no secondary offering is planned, at least officially

  • Report this Comment On April 21, 2012, at 11:53 AM, TMFCheesehead wrote:

    @lovesstocks2-

    On March 29th, the company filed paperwork with the SEC to raise capital through various avenues, including offering common shares. Here's a link to the filing:

    http://www.sec.gov/Archives/edgar/data/1123647/0001193125121...

    Best,

    Brian Stoffel

  • Report this Comment On April 22, 2012, at 5:41 AM, oberta wrote:

    Very attractive stock ATPG especially in view of the future grow of oil and gas requirements. EpS $0.35 also with higher potential. Look to 9 may!

  • Report this Comment On April 22, 2012, at 2:28 PM, GreatPricePearl wrote:

    ATPG was first recommended by Motley Fool as a "Pay Dirt" pick by TMF platoish and then in Hidden Gems by TMFCanuck in their Oil Patch selections.

    We're going to have to look beyond May 9th earnings for progress, however. The Telemark workovers need to be executed as well as the Clipper hookups. If they get these projects done successfully, we should see the share price double from here.

    This would set up ATP for more progress next year with their Cheviot/Octobuoy North Sea project.

  • Report this Comment On April 23, 2012, at 7:16 PM, zaxbowow wrote:

    72% of Renren float is short? Seems like a classic setup...

  • Report this Comment On April 27, 2012, at 12:10 PM, 100tradejack wrote:

    From a technical standpoint, I would stay far away from SODA.

    Jack

    100 TRADE JACK

  • Report this Comment On April 29, 2012, at 9:39 AM, edson374 wrote:

    you dont think soda just had a double bottom Jack?

    I would say that the 50day might be resistance, but if it closes above that pivot point on volume could see it really push for the 40's again.

  • Report this Comment On April 30, 2012, at 3:43 PM, hemhog wrote:

    This looks to me like a variety pack of ways to lose money. Sodastream is nothing. Zagg is questionable at best. Renren could, indeed make a stunning rebound and become ever more popular among Chinese social site aficionados. Nope not buying that, either. ATP oil and gas might make a nice run, if the politicians don't clamp down on oil trading. OOPS! Mako looks like the only hope for a rewarding investment. And that hope is slim. What prompted you to pick these potential BIG loses and label them as potential big upsides? Your arguments, so far, are completely unconvincing.

  • Report this Comment On May 03, 2012, at 1:11 AM, zzpat wrote:

    One stock has already MADE its huge move and this is before earnings are reported....it's ZAGG....up over 16% during the past five days. As always two choices; sell before earnings and lock in the profits or wait for earnings and take your chances.

    Regardless, good pick.

  • Report this Comment On July 31, 2012, at 2:02 PM, tkell31 wrote:

    Well, looks like ATPG is going to be put out of their misery. Individual contributors or not ATPG was pumped for years as a great investment.

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