These Stocks Need More Than Their Pumps Primed

"Sell in May and go away" is a strategy that tells you to invest between Nov. 1 and April 30 and then sell your holdings through the summer doldrums. It was a strategy that seemed to be working as intended as the markets tumbled 7% in May. Yet they're making something of a comeback in June and now are up almost 4% -- with a near 1% gain yesterday alone -- with another eight trading days to go. But some stocks missed out on yesterday's joyride and fell by large percentages.

Let's see whether they had good reason to drop and sit out the manic ride up, as panic-fueled declines can sometimes make for excellent buying opportunities.

Revolving-door policy
In the shallow end of the Dow's spectrum was Hewlett-Packard (NYSE: HPQ  ) , which lost more than 1% of its value yesterday. Microsoft unveiled a viable tablet computer, the Surface, which was a thumb in the eye to HP, which failed miserably with its own tablet computer. It was so bad that HP actually considered spinning off its computer division before quickly backtracking. Still, it's a pale shadow of the powerhouse it once was.

Just the other day I was ridiculing independent oil and gas driller ATP Oil & Gas (Nasdaq: ATPG  ) for not having its ducks in a row when it comes to hiring a CEO. Its newly hired executive was awarded the top job on June 1, but quit just six days later because the two sides apparently couldn't agree on a contract. And the 1 million shares of ATP stock he was going to buy as a condition of getting the top spot were also rescinded. You're supposed to have those things ironed out before you make announcements, no?

Well, they weren't alone, as retailing icon J.C. Penney (NYSE: JCP  ) got into the act, ousting its president Michael Francis a mere eight months after he joined the guard. He'll get a lot more gold rings on the way out the door in the form of a compensation package that nets him around $15 million. Not bad for less than a year's worth of work. The stock dropped more than 8.5% yesterday.

Apparently Penney's president wasn't happy with the pace of the turnaround they were trying to make after the department store posted a $163 million loss in the first quarter as sales plunged 20%. He likely also wasn't happy with the everyday-low-price strategy Johnson implemented, which drove shoppers out of the stores and into the arms of rival Macy's. The metamorphosis into a glorified Sears Holdings only let critics snicker at the comparison.

I rated Penney's to underperform the market on CAPS in the aftermath of this revolving-door strategy, but I intend to keep this CAPScall in place only for a short time. The venerable Penney's is not doomed but has merely been set back. When the dust settles it will become a viable competitor to Kohl's yet again.

Tell me on the J.C. Penney CAPS page or in the comments section below whether you think this drop represents a blue-light special, then add its stock to the Fool's free stock-tracking service to see how quickly the department store chain is worth more than just pennies on its sales.

No Delilah for this Samson
After selling off its Greater Green River Basin properties in Wyoming last year to Chesapeake EnergySamson Oil & Gas (AMEX: SSN  )  paid off its debt and bolstered the cash it has sitting in the bank. It made for a very nimble operator as it focused more on its liquids assets.

Yet after it updated investors on four of its wells in the Bakken, the market was less than impressed with the progress it was making and sent its shares tumbling 21% on the day. Perhaps because it comes on the heels of management's attempt to issue millions of options and shares to directors only to quickly shelve the plan in the wake of shareholder outrage, investors might have overreacted to the latest news.

Samson has assets in some of this country's most promising oil and gas regions, so the prospects for a quick recovery are good. Oil now accounts for 70% of Samson's production, which is a near 180-degree turn from the year-ago period, when gas comprised 85% of production. With higher margins these days in oil and liquids, Samson has made the smart moves it needed to.

Investors might be upset with the pace of change, but I'm rating the oil and gas play to outperform the markets on CAPS. That puts me in good company, as 92% of the 306 members rating Samson believe it will beat the Street going forward.

Add its stock to your Watchlist to see whether investor anger abates, then tell me in the comments box or on the Samson Oil & Gas CAPS page whether you think the market's only looking at half the story.

Ready for a resurrection
Big tech stocks like Hewlett-Packard might be a mess these days, but you should still check out the new free report The Motley Fool's created: "Forget Facebook -- Here's the Tech IPO You Should Be Buying." It details a much better social media stock that has a longer runway for growth than its bigger rival. The report won't be available forever, so click here to get access today -- it's totally free.

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 Chesapeake Energy Corporation and Microsoft. Motley Fool newsletter services have recommended buying shares of Microsoft. 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.


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