In music, they're called one-hit wonders: singers who belt out one chart-topping tune, but are never able to regain the magic of their big hit song. Think Norman Greenbaum's "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. These companies burst onto the scene -- many during the tech-bubble heyday -- but never lived up to the promise they held.
Whole lotta shakin' going on
While nostalgia's fun, "9 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 nine stocks that made some of the biggest moves up over the past month. We'll then pair that information with the ratings issued by our Motley Fool CAPS community. A higher rating means the members believe the stock will continue to move higher in the future and outperform the market.
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Stock
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30-Day % Change
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CAPS Rating (out of 5)
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PharmaNet Development Group
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251.45%
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****
|
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Ampal-American Israel (Nasdaq: AMPL )
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119.54%
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*
|
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Isramco (Nasdaq: ISRL )
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113.88%
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*
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InterMune (Nasdaq: ITMN )
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109.03%
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*
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MIPS Technologies (Nasdaq: MIPS )
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90.83%
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****
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NovaGold (NYSE: NG )
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87.36%
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****
|
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ZymoGenetics (Nasdaq: ZGEN )
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86.51%
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**
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Research Frontiers
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67.09%
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*
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Arena Pharmaceuticals (Nasdaq: ARNA )
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65.41%
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****
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Almost half of these stocks are carrying a four-star rating. Let's see why the CAPS community thinks even some of the lesser lights on the list might outperform the market.
Arena Pharmaceuticals
Obesity-related health and economic costs are estimated to be as high as $100 billion a year, according to an article in an AMA journal. For years, pharmaceuticals have tried to develop a fat-burning pill that works without creating side effects that might be as dangerous as the condition it addresses. Arena Pharmaceuticals thinks it might be on track to succeed in that quest with lorcaserin, a therapy that performed well in mid-stage trials. It is set to report late-stage trials next month, and CAPS member cpumplun2 is expecting "great news":
One word... Lorcaserin. The stage 3 results should be coming late March. Expect great news and watch the stock fly. Already starting to take off.
cpumplun2 is right that shares are already starting to take off: They've risen more than 80% from their lows at the end of January. Yet the competition remains stiff, as there is a lot of fat profit to be made from success.
InterMune
Another pharmaceutical reaping the rewards of success in its drug trials is InterMune, which recently reported that its therapy for idiopathic pulmonary fibrosis enjoyed some positive results in phase 3 testing. While the company had hoped for better than 50-50 results, the Motley Fool Rule Breakers recommendation is pushing ahead with marketing applications in both the U.S. and Europe.
Top-rated CAPS All-Star zzlangerhans isn't so sure the drug is about to gain acceptance from the FDA, and if the agency doesn't give a ringing endorsement for InterMune's new drug application (NDA), then the stock could crash. zzlangerhans writes:
What I see happening with Intermune and pirfenidone from here is one of two things. The first is a short-term negative catalyst of a revision or finalization of CAPACITY results (a la Elan) which will cast them in a much more negative light. Alternatively, Intermune will proceed with the pirfenidone NDA which will likely result in an FDA advisory panel meeting. I'm thinking about contacting the FDA and offering to write their position papers prior to the panel meeting. I already know what they're going to say. Bad, bad, bad. The model here is Dyax and DX-88. But in the case of Intermune I don't see the panel being so forgiving. One way or another, Intermune will be forced to initiate a new phase III trial of pirfenidone.
Shake, rattle, and roll
These stocks have been shaking the market over 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 your fellow investors have made, all from a stock's CAPS page.
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