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5 Superball Stocks

Rich Smith
February 6, 2012

When stocks fall fast and far, they sometimes set themselves up for remarkable rebounds. The following equities suffered dramatic drops over the past week. With help from the 180,000 members of Motley Fool CAPS, we'll see whether any of them have the potential to bounce back.

It's been a while, but thanks to last week's sell-off, we once again have a chance to stand beneath Mr. Market's silverware drawer in hopes of snagging a bargain. Let's meet today's contenders:



How Far From 52-Week High?

Recent Price

CAPS Rating (out of 5)

SandRidge Energy (NYSE: SD  ) (45%) $7.22 *****
ATP Oil & Gas (Nasdaq: ATPG  ) (69%) $6.50 ****
Niska Gas Storage (NYSE: NKA  ) (53%) $9.36 ****
Polypore International (NYSE: PPO  ) (36%) $46.83 ***
AK Steel (NYSE: AKS  ) (50%) $8.79 ***

Companies are selected by screening on for abrupt 10% or greater price drops last week. 52-week high and recent price data provided by CAPS ratings from Motley Fool CAPS.

Five super falls -- one superball
After taking a brief breather from its strong run in January, the Dow resumed its upward march last week, ending 1.6% higher than it began. Not everyone's cheering, though. In fact, more than 100 stocks -- including the five named above -- were literally decimated, losing 10% or more of their market cap in just a few short days. So what went wrong?

Steelmaker AK Steel was bouncing along just fine early in the week -- up a little here, down a little there -- until on Thursday it suddenly imploded. Citing fears that AK might need to pay for pension costs by selling shares to raise cash (since it seems incapable of generating cash from selling steel), Bank of America downgraded AK shares to underperform. AK ended the week down nearly 12%.

In other news, filters-maker Polypore got crushed Tuesday. Key customer LG Chem announced it was getting into the battery separator business, and analysts warned LG might not need to buy separators from Polypore anymore. The shares rebounded a bit as traders closed their shorts, and investors began to think the selling had become overdone. Even so, Polypore remained down 16% for the week.

Of course, some of the biggest damage done last week was in the energy sector, and in particular, the natural gas industry. Citing overflowing ("overfloating"?) supplies of natural gas that have accumulated over a long, warm winter, The Wall Street Journal voiced worries Friday that nat-gas prices -- already in the dumps -- might actually turn negative if demand doesn't pick up soon. You read that right: The Journal is saying we could soon see a scenario in which nat-gas companies have to pay people to take gas off their hands.

Scary. And as you can imagine, it's not doing any favors for the stock prices of Niska Gas Storage or ATP Oil & Gas. The report of a quarterly loss (Niska) and a downgrade from Rodman & Renshaw (ATP) didn't help, either.

Even trying to deal with the situation seems to hold some peril. In its continuing effort to raise cash to invest in non-nat-gas projects, SandRidge Energy has already spun off two s