There are one-hit wonders, and then there are those stocks for which the initial big move is only a preview for even bigger and better gains to come.
Today, we list a handful of stocks that, despite the incredible volatility in the market, made some of the biggest moves higher over the past month. We'll pair them with the ratings issued by our Motley Fool CAPS community to gauge their sentiment of the future for these companies. The higher each stock's rating, the greater CAPS members' faith in that company's ability to keep on beating the market.
1-Month % Change
CAPS Rating (out of 5)
|Pacific Sunwear (Nasdaq: PSUN )
|Novavax (Nasdaq: NVAX )
|Entropic Communications (Nasdaq: ENTR )
|Smith & Wesson Holding (Nasdaq: SWHC )
|Jamba (Nasdaq: JMBA )
A mighty temblor
At the top of the list we find insiders snapping up shares of teen retailer Pacific Sunwear, generating as much enthusiasm for investors as audiences watching Tony Hawk do his 720-degree Varial. While that caused the stock to bounce off its lows, the surf-and-skate clothing shop still has to restore its credibility among teens, and some analysts feel they'll just end up with scraped knees. Zumiez resonates more with the crowd now, and Quiksilver is staging a comeback too. PacSun may find its day in the sun is behind it.
Then at the bottom of the list, but equally lacking in the sustained confidence department, is juice maker Jamba, which saw its shares rise along with the thermometer. It was theorized that as we sweated bullets throughout the summer, we'd turn to smoothies to slake our thirst. That seems just as ephemeral a reason as its partnership with the U.S. Olympic team. Sure, people do buy products in a lemming-like fashion simply because they see some celebrity doing likewise, but the Olympics will be here and gone before you know it, and if Jamba doesn't have more to offer than that, look for shares to melt once again.
At least gunslinger Smith & Wesson Holding had a reason for its stock shooting high: People were buying gunnery at a brisk clip. Fourth-quarter earnings came in much stronger than expected, and while backlog doesn't neatly translate into one-to-one sales, a 135% increase in backlog suggests it will be selling boatloads of peashooters in the near future. A 28% jump in sales that was split nicely between pistols and rifles led to surging profits, too.
CAPS member kahunacfa believes that gun buyers once again fear "the potential prospect of Federal firearm ownership restrictions," and that's spurring sales, but you can tell us whether you agree in the comments box below.
I'll have a MoCA latte
Strong sales of Entropic Communications' MoCA chips are propelling the living room connectivity specialist higher. The chips let devices use coaxial TV cables for high-quality networking purposes, and its recently acquired set-top-box SoC business is growing like gangbusters, allowing Entropic to raise per-share profit guidance.
The acquisition of Trident Microsystems is apparently playing out even faster than mikemar05 anticipated back in April, but it goes to the core of why I rated the chip specialist to outperform the broad market averages: The connected living room is upon us. You can rate the stock, too, by heading over to the Entropic Communications CAPS page and weighing in on its prospects for future growth.
Running out the clock
Vaccine maker Novavax may have run more than 40% higher before falling back 14% from the peak it reached on the news it had positive clinical trial developments for one of its treatments. But as I noted earlier this month, since the testing is still in early stages, it is way too soon to be getting this excited. Even its more advanced stuff for the H1N1 virus is still in mid-stage trials, so all the hoopla is much ado about nothing.
Well, maybe not nothing, but if you decide to get in at this point in Novavax's development, you definitely won't be tardy to the party. You may, however, find yourself unfashionably early and having your money hibernating with no assurance of success.
I should've rated Novavax to underperform the market two weeks ago when it popped, but as pchop123 notes, there's still room for a rapid decline, so I'll do so now. That's not to say I think it will fail, but rather that the run-up in its stock was premature and there will be plenty of time down the road to get in on the fun.
Let me know in the comments section below or on the Novavax CAPS page whether you agree that while you may lose out by being fashionably late to a stock, it can be just as ruinous financially to show up too early and be stuck with dead money.
Raise your sights
These stocks may have seen significant price appreciation, but there's a new technological revolution with even wider implications for a handful of companies, and The Motley Fool has discovered three stocks ready to capitalize on the boom. Read the free report "The Future Is Made in America" to find out who these winners are, but hurry, because it's available only for a limited time.