Surprises are part of the game when it comes to picking stocks. Sometimes this can mean bad news, like one of your top stocks revealing that management has been posting anonymously to online message boards.
Other times, though, the market gets caught off guard by positive surprises from stocks that most investors thought were down for the count. In this situation, investors who stood by the stock often break out into a chorus of "I told you so," as short sellers are forced to figure out just how much pain they can take.
To dig up some of these unloved stocks that have been defying naysayers, I'm turning once again to The Motley Fool's CAPS community. Each of the companies below had been given a one-star rating (the lowest) by our community of investors just 30 days ago:
|
Stock |
30-Day Return |
One-Year Return |
Current CAPS Rating (out of 5) |
|---|---|---|---|
|
Sonesta International Hotels |
62.0% |
193.1% |
* |
|
Basin Water |
41.7% |
33.3% |
* |
|
Research In Motion |
36.0% |
243.1% |
* |
|
Alexion Pharmaceuticals |
30.8% |
71.9% |
* |
|
Standard Register |
25.7% |
18.3% |
* |
|
Amazon.com |
25.5% |
156.6% |
* |
|
Sigmatel |
23.6% |
(6.2%) |
* |
It's important to remember that some of these stocks, particularly the smaller, more volatile ones, could just as easily reverse these big gains over the next 30 days. In some cases, though, the strength could be a sign that the prospects for the company have changed for the better, or that it had been beaten down just a little too far.
So the question with these stocks is: Are they better than CAPS players had thought, or are they just singing that proverbial swan song? The best way to get a feel for where these guys are headed is to dig in and do some research. I thought I'd kick you off with some thoughts on Research In Motion.
Talk about motion!
Research In Motion may not be a household name, but its flagship product, the BlackBerry, most definitely is. A staple device for workers in a wide variety of industries, the BlackBerry seems to be everywhere.
Though the ubiquity has driven great results, it has also painted a target on the back of the BlackBerry for its competition. Many players on CAPS have noted this and think that competing phones -- particularly Apple's new, shiny iPhone -- could put a dent in RIM's business. One such investor is Jburger2007, who says that RIM will "get hit with iPhone effect. [The stock will stay] at present level until replacement applications become available for the iPhone. At which time a huge migration should occur."
Dethroning an incumbent with penetration such as the BlackBerry, though, is easier said than done. For Apple in particular, the flashy, music-playing iPhone may be a tough pitch as a replacement for the utilitarian, secure, and dependable BlackBerry. Furthermore, for all the effort that competing companies are putting toward beating out RIM, you can be sure RIM is expending a similar amount of effort trying to increase its lead.
It's currently a tug-of-war on CAPS, with 822 players in favor of the stock and 693 thinking it's ready to turn south. Many of the top players on CAPS, including Top Fools SpecBear and luvb2b, are on the underperform side, but have been wrong to the tune of 50 points or more. Others, such as tdedmondjr, think the situation is simpler and have been swimming with the RIM tide. On RIM, tdedmondjr thinks that it's a "no brainer. Blackberry is the best thing out and every businessperson wants one."
So, do you think the BlackBerry will retain its dominance and continue to confound some of the top Fools on CAPS? Or has the stock just gotten too high for its own good? Head on over to CAPS and let the community know what you think. While you're there, you can start your research on any of the other stocks listed above -- or any of the 4,700-plus stocks on CAPS.
More CAPS Foolishness:
Amazon is a Stock Advisor recommendation.
Fool contributor Matt Koppenheffer didn't see these particular moves coming, but he's rarely surprised at Mr. Market's general tomfoolery. You can check out Matt's CAPS portfolio here, or visit his blog. He does not own shares of any of the companies mentioned. The Fool's disclosure policy is never going to give you up, it's never going to let you down, and it's definitely never going to run around and desert you.
