10 Stocks to Shake the Market

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In music, they're called "one-hit wonders." These singers belt out a single hit tune, but can never again regain its magic. Think Norman Greenbaum's "The Spirit in the Sky" or Brownsville Station's "Smokin' in the Boys' Room" -- monster hits never to be repeated.

We have seen similar one-hit wonders in stocks, too, like Pets.com or drkoop.com. Companies burst onto the scene -- many during the tech bubble heyday -- and never to live up to the promise they held.

Whole lotta shakin' goin' on
While nostalgia's fun, "10 Stocks to Shake the Market" isn't about finding stocks that can't repeat their success. It's about looking at those that have made big moves and are likely to continue doing so.

To do that, we're looking at 10 stocks that made some of the biggest moves up over the past month. We'll then pair that with the ratings issued by our Motley Fool CAPS community. Those rated higher suggest that the members believe they'll continue to rise in the future, ultimately outperforming the market.

In the first 20 months since we first began tracking the collective intelligence at CAPS in late 2006, the data show that newly minted five-star stocks offer the best opportunities for investors, while the lowest-rated companies fared the worst. Four-star stocks outperformed the market by seven percentage points, and five-star stocks -- top honors in CAPS -- did even better.

Stock	30-Day  % Change	CAPS Rating
Advanced Medical Optics	259.77%	**
Palm (Nasdaq: PALM)	259.55%	*
Northfield Laboratories (Nasdaq: NFLD)	104.08%	***
Allied Capital (NYSE: ALD)	84.00%	**
PIMCO High Income Fund	72.18%	***
Primus Guaranty (NYSE: PRS)	71.11%	*****
Level 3 Communications	63.89%	****
Unisys (NYSE: UIS)	62.07%	*
Interoil (AMEX: IOC)	61.11%	*
Gastar Exploration (AMEX: GST)	60.53%	*****

With three of 10 stocks carrying a four-star or better rating, let's see why the CAPS community thinks even some of the lesser lights might outperform the market or not.

Palm
Until the introduction of the Pre, people would look upon Palm as the kindly old codger sitting in the corner, forever reminiscing about his glory days. Now people are talking about a resurgent Palm, one that averted doomsday and can once again hold its own. Yet for all the buzz the Pre is creating, CAPS member earlystart thinks the market's reaction is out of all proportion to reality:

Sorry Palm, the I'm sure the Pre is a great product, but a great product doesn't make a great company. This release, however good, is just too late. ...

In addition to all that...this stock is up beyond all reason. The amount of income the Pre is going to generate does NOT add up to a 70% value increase. This price is not sustainable.

If Palm can get its mojo back and rebuild its long lost cache with techies, I'll be a believer. That means consistently outstanding new products that offer genuinely NEW capabilities...not slightly improved rehashes of 5 other already outstanding products.

Interoil
The announcement last week that Interoil had discovered what it describes as "apparently the largest vertical section of continuous reservoir of gas and gas liquids discovered to date in Papua New Guinea" caused investors to pump its shares up 20% in just one day. The find may also help dispel some investors' doubts about Interoil; at present, more than half of the CAPS members rating the company believe will underperform the market. CAPS member wjwcapital figures: "Large discovery announced in early January. That with bottoming prices shoud send shares higher."

Shake, rattle, and roll
Now that these stocks have shaken the market in the past month, it pays to start your own research on them at Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments that your fellow investors have made, all from a stock's CAPS page.