Whoa! My Stock Crushed the Market!http://www.fool.com/investing/general/2011/11/02/whoa-my-stock-crushed-the-market.aspx Rich Duprey
November 2, 2011
With Greece threatening world stability by taking its bailout package to a referendum, markets were in a rout globally. But just because your stock strapped on a rocket pack and went even higher, resist the urge to high-five everyone in the cubicles next to you. Smart investors won't celebrate until they know that upward leap was justified. Without a fundamental basis for the bounce, these stocks can quickly make the return trip down.
Is now the time to lock in profits, or is this just the first step toward even higher valuations down the road? Let's examine several stocks that just hit the afterburners, and see whether they're truly headed into orbit.
Source: Motley Fool CAPS.
With the markets falling 297 points yesterday -- or 2.5% -- stocks that went appreciably higher are pretty big deals.
Shining a light on growth
It's obvious the misguided witch hunt the Obama administration has been on against the industry is taking its toll. DeVry (NYSE: DV ) reported worse-than-expected losses last week, Career Education saw its margins cut in half, and Apollo Group (Nasdaq: APOL ) saw its new student starts slashed by a third.
Yet looking ahead, Corinthian is hoping to breakeven next quarter with profits of as much as $0.35 a share for the full year coming in. That will be helped along by enrollments turning north again in late 2012.
I'll admit I'm not as hopeful as some. The persecution of profit-making businesses will be tough to counteract as the regulatory burden weighs down operations. The investment community might disagree, as 84% of the CAPS members rating Corinthian think it will outperform the broad indexes. Yet the two-star rating they've assigned it suggests they do think there are better places for your money.
Add the for-profit educator to your watchlist and let us know in the comments section below or on the Corinthian Colleges CAPS page if making money while helping others learn is an evil concept to you, too.
No generic opportunity