10 Stocks to Shake the Market

In music, they're called one-hit wonders -- artists that belt out a tune that everyone loves but are never able to regain the magic of that big hit song. Think Norman Greenbaum's "Spirit in the Sky" or Brownsville Station's "Smokin' in the Boys' Room." Monster hits, never to be repeated.

We have seen similar one-hit wonders in stocks. Think Pets.com or drkoop.com. They're companies that burst on the scene -- many during the tech-bubble heyday -- but never lived up to the promise they once held.

Whole lotta shakin' going on
Although nostalgia's fun, "10 Stocks to Shake the Market" isn't about finding stocks that can't repeat their success. It's about looking at those that have made big moves and are likely to continue doing so.

To do that, we're looking at 10 stocks that made some of their biggest upward moves over the past month. We'll then pair that information with the ratings issued by our Motley Fool CAPS community. Higher ratings suggest that our CAPS members believe those stocks will continue to rise and outperform the market.

Ever since we began tracking the collective intelligence at CAPS in late 2006, the data has shown that newly minted five-star stocks offer the best opportunities for investors, while the lowest-rated companies fared the worst. Four-star stocks outperformed the market by seven percentage points, and five-star stocks -- those with top honors in CAPS -- did even better.

With all but one of the stocks carrying a rating of three stars or better, we're going to zero in on some of the names that CAPS members think will continue to outperform the market.

Force Protection
Despite having gotten its marching orders on supplying the military with next-generation Humvees, Force Protection was able to bolster its bulwarks with greater revenue from spare parts and services. The defense contractor enjoyed a jump after its earnings report, but CAPS member fmahnke thinks the market will be playing "Taps" for the company soon enough.

Stock has jumped [because of] favorable earning reports and analyst upgrades. However, upside is limited by loss of Humvee potential and backlog has shrunk considerably. The company continually fails to generate [operating] cash flow and faces defense spending headwinds in a fiscally strapped Obama administration.

Immunomedics
An agreement with Nycomed keeps the revenue flowing at Immunomedics. CAPS All-Star zzlangerhans sees that pact as a critical piece of the puzzle that allows the biotech to overcome some weaknesses in other areas of its business:

I'm a former red thumber and even though I remain pessimistic long-term, I think Immunomedics is relatively undervalued in the [short term] after a favorable licensing deal for veltuzumab with Nycomed. Besides the critical [$40 million] cash infusion, Nycomed will be taking over development of veltuzumab for non-cancer indications and will begin initiating trials for rheumatoid arthritis. Nycomed has far greater resources and their involvement will help maintain Immunomedics as a viable company and stock for quite some time even if trial data in hematogenous malignancies is weak.

VASCO Data Security
Having a list of clients from the financial industry is like reading a who's-who list of companies in need of a government handout just to stay viable. But data-security specialist VASCO is finding its services still necessary, and it ought to be able to grow from here. CAPS member TheShadowFox sees the value opportunity in a beaten-down stock unfairly lumped in with an even more beaten-up sector:

VASCO's management is fully invested in the company. Its DigiPass product is constantly being upgraded and new international locations are being opened. Since it is so highly correlated with the financial sector (most of its customers are banks) its stock has taken a beating. Look for VASCO to become a leading preferred provider of data security.

Shake, rattle, and roll
With these shakeups in the market over the past month, it pays to start your own research at Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page.