There are one-hit wonders, and then there are those stocks where the initial big move is only a preview for even bigger and better gains to come.
Today, we list a pair of stocks that despite the incredible volatility in the market made some of the biggest moves higher over the past month, 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.
|Pandora Media (NYSE: P )||19.3%||*|
|TASER (Nasdaq: TASR )||22.7%||***|
Source: FinViz.com; 1-month % change from April 30 to May 29.
While you were out, the markets turned tail and fell on concerns over Europe's fragile financial system. So before we get shaken out again, let's see why the CAPS community thinks some of these companies might continue to outperform the market.
A mighty temblor
Losses might have tripled at Internet music giant Pandora Media, but they were better than what Wall Street was forecasting. Also, they occurred because it was trying to gain new customers, so the market cut it some slack and drove shares higher. Be that as it may, I'm still having difficulty getting any good vibes from Pandora as a long-term investment.
It's clear the songstress is pursuing growth and eschewing profits for the time being. But content acquisition costs continue to be a drain on performance, and as we've seen with other media companies that rely upon others for content -- Netflix immediately comes to mind -- it can be a costly pursuit. Sirius XM Radio (Nasdaq: SIRI ) has survived as a result of regularly improving its subscriber acquisition costs.
Not everyone is scared off by the prospect. The Fool's Jeremy Bowman says you have to cut Pandora some slack here since the industry is still in its infancy. Give it time and it will be profitable. But that's my main problem. There are just too many services competing for consumer's attention. Rhapsody and Spotify allow for greater consumer customization while Apple and even Amazon.com provide alternatives, not to mention Sirius itself. The race is on and Pandora is running out of time.
While admitting Pandora's ads are "obnoxious," CAPS member actuary99, a user of the service, sees the possibility of profits closer on the horizon than it's usually given credit for. Tell us in the comments section below if you agree, then add Pandora Media to your watchlist to tune in to the latest developments.
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Stun gun maker TASER was moving higher on the charge delivered by its latest earnings report: Revenues were 11% higher than the year-ago period and handily beat analyst expectations as they were expecting sales to fall. Profits were also way ahead of forecasts and last year's performance, too.
While the media love to sensationalize alleged abuses of TASER stun guns, its latest X2 version actually limits the potential for such abuse -- it has five-second limits on charges -- and police departments across the country are responding positively to the change. TASER has been offering generous trade-in terms to departments to upgrade from older models. It didn't hurt either that an appeals court reduced a judgment against the stun gun maker, which left more than $1 million extra in its coffers.
Higher sales have driven the performance of both Smith & Wesson Holding (Nasdaq: SWHC ) and Sturm, Ruger, with the law-enforcement-heavy M&P division of Smith & Wesson a primary reason for its better results.
With more than 1,000 CAPS members weighing in on the less-than-lethal weapons maker, 92% see it outperforming the market averages. Add TASER to the Fool's free portfolio tracker and tell us on the TASER CAPS page if there will be additional shocking earnings reports in its future.
Shake, rattle, and roll
These two 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.