Your stock just took a nosedive -- but don't panic. First, let's see whether it had good reason to fall. Sometimes, panic-fueled drops can make excellent buying opportunities. Here's the latest crop of cratered stocks that could provide a possibility for profit:
Stock | CAPS Rating | Monday's Change |
|---|---|---|
| pSivida | ***** | (18.4%) |
| Tesla Motors | * | (15.1%) |
| XOMA | ** | (14.3%) |
Maybe the East Coast blizzard had everyone locked in. The markets barely moved the needle, declining a mere fraction of a percent, so stocks that fell significantly further are still big deals.
The devil's in the details
Easy come, easy go. XOMA jumped higher after an analyst said the biotech may have the best diabetes treatment in its experimental drug XOMA 052 when compared to offerings from Eli Lilly
Tesla got whacked because the lock-up period of its IPO shares expired, meaning insiders can start selling their shares. After going public in the summer at $17 a share, Tesla's shares surged to more than $35 earlier this month. With the lock-up period ending, the number of shares available for trading could potentially triple, according to analysts at Morgan Stanley. With doubts about how big the electric car market can grow, investors dumped the stock in a hurry.
The car company attracted a $30 million investment from Panasonic, and Toyota
It's going to take time for the market to become assured of Tesla's growth potential again and work off the big overhang of IPO stock, but highly rated CAPS All-Star RXDOC73 believes the end result will be someone coming in and buying Tesla's technology.
On the other hand, CAPS member djturn3 thinks investors may have gotten caught up in the "oooh-and-aaah" factor associated with its sleek electric vehicles: "This company makes luxury electric cars during a market where car makers with less expensive generic electric cars are having trouble getting them off the lots. I dont get it."
Let us know on the Tesla CAPS page how long before the market puts a charge back into its stock.
Taking your eye off the ball
Alimera Sciences
For pSivida investors (and Alimera shareholders, too), the FDA decision isn't as harrowing as the drop in the stock would indicate. As the Fool's Brian Orelli points out, the FDA wants to view three-year data for the drug, and Iluvien is already through its third year of trials. Alimera is in the midst of compiling the data, and assuming the data are as favorable as they have been, both drug companies could be back to where they were before the decision.
Even after yesterday's tumble, pSivida shares are well above where they were back in August, before the FDA had granted Alimera a priority review. So if you had been waiting for a chance to buy the stock, this recent price drop may be your chance.
With 95% of the CAPS members rating pSivida marking it to outperform the market, it looks like some investors have been eying its potential. Let us know your thoughts on the pSivida CAPS page today.
You can also add it to your free Fool.com portfolio tracker, and have all the Foolish news and analysis compiled together for you in one spot.
Ready for a resurrection
Just because your stock has taken a beating doesn't mean it's going to roll over and die. Markets are known for overreacting. A closer look at what has happened to your stock can give you an edge over other investors who just react to the market's lead.
That's why it pays to start your own research on these stocks on Motley Fool CAPS, where you can read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from the stock's CAPS page. Then you can decide for yourself whether it's ready to come back from the dead.
