It's always hard to sell when your stock is on a run. When do you sell? When do you let go? Well, maybe it's time to sell when you have a community of 10,000 people telling you to do so.
Take a look at these five stocks that have been on hot streaks recently:
|
1-month return |
3-month return | |
|---|---|---|
|
Research In Motion (NASDAQ:RIMM) |
29.73% |
74.76% |
|
Medis Tech (NASDAQ:MDTL) |
35.06% |
32.46% |
|
Evergreen Energy (NYSE:EEE) |
17.67% |
5.71% |
|
Crocs (NYSE:CROX) |
30.03% |
64.14% |
|
Altair Nanotech (NASDAQ:ALTI) |
11.90% |
18.99% |
Yes, each of these has gained a significant amount in the past month and over the past three months. So what's wrong with holding on to them? For one thing, these stocks are shunned by our community of investors at Motley Fool CAPS, a new stock-picking investment service.
Right after RIMM's most recent earnings release, Sajix2 stated:
A rosy outlook going forward is great to pitch to investors and analysts, however, one slight miss and the stock plummets. Given the increased competition (Palm 700wx, Nokia E62, etc.) and the lack of media capabilities on all phones except one, no way RIMM can match its own guidance and the market will make it pay fiercely, just as it rewarded them today.
Or maybe this one on Crocs from TMFDoraemon sounds an alarm:
This is worse than a fad. The secondary is all about insiders selling, the company has yet to show any kind of free cash flow generation, there is no moat around this business, and the company has all kinds of bizarre arrangements with executives and board members for distribution of its products. Run away, this is not worth $1 billion.
Or does what TMFDitty has to say about Evergreen Energy touch a nerve?
Priced at 73x sales (!), with GAAP earnings declining in each of the last two years, and consistently burning cash, I'm not prepared to say the company is worth nothing, but I can say for sure this it is not worth as much as profitable coal-tech company Headwaters. Hence, Evergreen's price must turn red -- and the lower oil's price falls, the redder Evergreen will get.
Maybe you agree with one of these opinions. Maybe you agree with all of them. Either way, keeping an ear open for what the market is saying is never a bad move. You can learn why your stock is out of favor, why you should do more research, or why you should, in fact, sell that stock now.
Actually, that's the whole purpose of our CAPS stock service. You get free access to the 10,000-member community's opinions about every single stock in the database. In addition, you can add your own opinion and rating as you compete to become a CAPS All-Star.
Every single one of the stocks mentioned above is currently a one-star stock in CAPS. Whether you agree or disagree, now's the time to get in the game and make your voice heard.
You might find a stock idea or two, you might find an inside scoop, or you just might find a reason to sell. Just click here to start your CAPS adventure absolutely free today.
Fool sector head Shruti Basavaraj owns no shares of any company mentioned above. She is, however, a CAPS All-Star. To challenge her rating, just click here to start your mission. The Fool's disclosure policy is always airtight.
