3 Stocks That Will Probably Make Big Moves This Week

A high short interest, combined with earnings reports on the horizon, means the stocks of these three companies could be making huge moves.

Feb 2, 2014 at 7:00AM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

Every earnings season has its fair share of surprises and stocks that make huge moves, but rarely can we predict who those movers are going to be before it actually happens.

But by focusing on companies that are about to file earnings reports -- and that have a large number of investors shorting their stocks -- we can do just that. The three stocks I identified last week as poised for huge swings moved an average of 12% following earnings.

Of course, as long-term, buy-to-hold investors, we Fools aren't fans of trying to time the market. Instead, this article serves as a heads-up for shareholders in these companies. Big moves might be ahead, and before making an emotional decision to buy or sell based on large swings, investors need to reassess their original theses for buying shares in the first place.

This week, here are the three stocks to look out for:


% of Shares Short


Expected Revenue (millions)

Expected EPS

Corinthian Colleges (NASDAQ:COCOQ)





Pandora (NYSE:P)





Outerwall (NASDAQ:OUTR)





Source: finviz.com, E*Trade.

Corinthian Colleges
Back in 2011, I warned investors that for-profit educators were shady investments, based largely on questionable recruiting practices and ballooning student loan default rates. Among the industry players, I found Corinthian Colleges to be worst of the worst. Since then, the stock has fallen 65%.

Though the company actually expects to show growth in total enrollment during the current school year, lawmakers have recently clamped down once again on what they see as predatory and misleading recruitment tactics. Corinthian recently acknowledged that it, along with three other industry players, had been contacted by a network of 12 state attorneys general probing violations in such areas. While enrollment numbers will be important to determining how the stock fares on Wednesday, investors should listen closely to any details regarding these probes.

Everyone's favorite Internet-based radio station has enjoyed quite the year. Since the beginning of 2013, shares of Pandora are up 300%. Where once the company sported an unprofitable business model -- paying more in royalties than it took in from advertising and subscription dollars -- many now see a permanent force on the music scene.

Much of the turnaround can be credited to the fact that Pandora has been able to show that it can win over customers in the face of increased competition. Combine that with a focus on local advertising -- and the fact that advertisers know exactly how many people hear their ads, which isn't true with AM/FM radio -- and you can see why investors are excited.

But the company is still unprofitable over the past four quarters and trades for 100 times earnings. It's not hard to see why bears believe the stock will go down in the near future.

Finally, we have Outerwall. If that name doesn't sound familiar, it's because the company used to be known as Coinstar. The most recognizable division of the business is its chain of Redbox machines spread out in convenience and grocery stores across America.

Screen Shot

 The company's stock fell precipitously in September, when it announced that sales from DVD rentals came in lower than expected, thanks in part to a promotional scheme that backfired. Shortly after, activist investors initiated large interests in the company's stock, hoping to unlock value from its high free-cash-flow levels.

While the performance of Redbox is certainly important, investors should listen in for any strategic changes on the horizon by way of these activist investors.

A steadier path to financial independence
Again, this article is directed more at current shareholders. It is not an invitation to try and time the market.

As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Brian Stoffel has no position in any stocks mentioned. The Motley Fool recommends Pandora Media. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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