Whoa! These 3 Stocks Took Off!

A hopeful September retail sales report lifted the markets higher yesterday by almost 1%, but don't get too excited: the non-seasonally adjusted numbers show a really big decline. Yesterday's euphoria may yet turn into tomorrow's melancholia. But some stocks were willing to celebrate anyway, surging well beyond the Dow's 95-point gain. Here are three that turned on the afterburners, rising by double-digit percentages.

Company

Gain

Clearwire (Nasdaq: CLWR  )

15.9%

Yongye International (Nasdaq: YONG  )

17.1%

James River Coal (Nasdaq: JRCC  )

23.2%

Resist the urge to high-five everyone in the cubicles next to you, however. Smart investors won't celebrate until they know why their stock surged, because without a fundamental basis for the bounce, these stocks could just as quickly make the return trip down.

Clearly an opportunity
Wireless equipment specialist Clearwire continued to ride the wave of excitement following the announcement that Japan's largest wireless carrier Softbank would be buying a 70% stake in Sprint (NYSE: S  ) for $20 billion. The cash infusion will let the U.S. carrier build out its 4G network as it tries to claw back share from Verizon (NYSE: VZ  ) and AT&T (NYSE: T  ) , but it also gives it a powerful weapon to buy up assets to do so.

One of those assets is Clearwire, which has gobs of valuable spectrum making it perhaps the real ultimate target of Softbank's strategy, since Sprint owns 48% of the equipment company. Because of the relationship between the two companies, the possibility of a rich premium for Clearwire keeps its stock moving higher. It was the reason I said Clearwire was the clear winner in this deal, but investors would do well to remember Softbank doesn't have to do anything to still reap the benefits of its technology. Yet with Clearwire preparing to deploy a TDD-LTE network next year -- the same 4G network technology that Softbank uses -- it may want full access to the spectrum to gird itself for the battle against its Japanese rivals in landing Apple's (Nasdaq: AAPL  ) iPhone.

Let me know in the comments box below what you think is an appropriate price tag for Clearwire's assets.

Sailing off into the sunset
Chinese fertilizer maker Yongye International also surged higher on the prospect of a potential deal yesterday, but this one is from the company's CEO and board of directors, who proposed taking the company private for $6.60 a share.

Chinese companies have been fleeing the U.S. markets. The Chinese government is encouraging the flight, with the state bank providing up to $1 billion to make the move. As a number of small Chinese shops turned out to be frauds, aspersions were cast over the broader universe of stocks.

Yongye was the subject of a series of disparaging reports last year made by short-sellers who effectively took the stock down. It got a bit of a reprieve when Morgan Stanley (NYSE: MS  ) invested $50 million in it, though I was skeptical it would amount to much, as I wasn't sure it's fulvic-acid-based fertilizer offered real value. It seems this go-private deal won't give investors the value they deserve, either.

Coal turns black
What was previously coal's bane may now prove to be its savior. Natural gas prices have been at historically low levels, and though still depressed, they moved above $3.60 per million British thermal units as the Energy Information Administration suggested there would be lower-than-expected injections into storage. That could lead to higher prices this winter, and they might even be north of $4 per million Btus next year.

That would no longer make gas the preferred choice for power plants, which might return to coal once again. And the possibility of foreign demand for coal heating up also pushed James River Coal and Alpha Natural Resources (NYSE: ANR  ) higher.

While hopeful, there's a lot of room for a number of scenarios to play out, not all of them good. I'd say coal investors, particularly those weighing in on James River, should enjoy it while it lasts. Shares are up 130% over the last three months and have nearly tripled from their lows. As I've noted before, while I like Alpha's prospects, I'm not so sure about the debt-laden James River, but you can tell me in the comments box below whether this turnabout is for real.

The best investing approach is to choose great companies and stick with them for the long term. In our free report, "3 Stocks That Will Help You Retire Rich," we name stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Rich Duprey owns shares of Apple. The Motley Fool owns shares of Apple. Motley Fool newsletter services recommend Apple. 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.


Read/Post Comments (8) | Recommend This Article (2)

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 October 16, 2012, at 5:45 PM, EnigmaDude wrote:

    Kind of ironic that this was published today when Clearwire lost more in market value than it gained yesterday...

  • Report this Comment On October 16, 2012, at 5:53 PM, randysandy wrote:

    Since you don't really know the fundamentals of jrcc, you need not make misleading, not to mention manipulative comments on it for your own sell side agenda. Why don't you instead transcribe the cc from aug 9? The problem here is that there is no regulation of you by sec period

  • Report this Comment On October 16, 2012, at 5:55 PM, randysandy wrote:

    Also interesting is that you choose to write this on a down day? You think someone wouldn't call you out? Pathetic

  • Report this Comment On October 16, 2012, at 6:10 PM, randysandy wrote:

    "Enjoy it while it lasts": just goes to show how manupulative retail bloggers operate. Ok : how long "will it last?"

  • Report this Comment On October 16, 2012, at 8:04 PM, randysandy wrote:

    Hey blogger: Can you give us facts and figures on jrcc? I won't hold my breath waiting for an answer.

  • Report this Comment On October 17, 2012, at 9:56 AM, randysandy wrote:

    Notice this guy doesn't respond to 4 legitimate comments. I'm glad I didn't hold my breath. He isn't responding because at the end of the day, and with all his rhetoric, he has no knowledge of the coal industry, he isn't sitting in jrcc's boardroom crunching numbers. He only speculates from hearing what another blogger wrote. Real legitimacy here.

  • Report this Comment On October 17, 2012, at 1:36 PM, justice215 wrote:

    JRCC has alot of exposure to the metalurgical coal demand and if this expands if the world economy heats up JRCC will bounce nicely, the cheapening of the dollar through Q-E-3, will raise all commodities some to,. Watch HERO as a parallel trade to this for as it rises so will JRCC .

  • Report this Comment On October 17, 2012, at 7:18 PM, randysandy wrote:

    Hey Rich: do you plan on answering any of the questions? I didn't think so. If you don't have facts to back up your personal agenda, then you shouldn't be posting

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