10 Stocks to Shake the Market

Some stocks are one-hit wonders, making a big splash when they first appear and then quickly fizzling into obscurity or oblivion. But for other stocks, that initial big move is only a preview for even bigger and better gains to come.

Today, we've compiled 10 stocks that made some of the biggest upward moves over the past month. We'll then pair that list with the ratings issued by our Motley Fool CAPS community. The higher each stock's rating, the greater CAPS members' faith in that company's ability to keep on beating the market.

With most of these stocks carrying below-average ratings, let's take a closer look at what the CAPS community thinks about one of them.

A mighty temblor
"Oops! Our bad." Private-equity shareholder Tang Capital Partners essentially said as much when it ended a proxy contest for control of Vanda Pharmaceuticals, after the tiny biotech won FDA marketing approval for its schizophrenia treatment iloperidone.

In the weeks leading up to the FDA news, Tang was not only asking for a seat at the table, but it was also pushing Vanda to cease operations, liquidate its assets, and distribute the proceeds to shareholders. You can just imagine management thinking, "What are you doing? We're on the verge of having our big drug approved and you want us to go out of business?" In hindsight, the timing seems ridiculous.

Of course, it's not hard to understand Tang's position. Last year the FDA had rejected Vanda's drug with a "not-approvable" letter, raising concerns about iloperidone's efficacy when compared with Johnson & Johnson's (NYSE:JNJ) drug Risperidone. Instead of going along with the FDA's request to perform new clinical trials and provide new safety data, Vanda instead chose to resubmit its original app along with additional data from those trials. Many believed the drug didn't stand a chance of getting approval.

Yet Vanda hit the lottery. Like other atypical antipsychotics, the biotech's drug, to be sold under the name Fanapt, will receive a warning label about the increased risk of death if it is used off-label for behavioral problems in older patients with dementia. Vanda also said that Fanapt may have safety advantages over competing drugs. In the clinical trials, rates of common side effects, such as restlessness and weight gain, were low, and patients didn't see their cholesterol or triglyceride levels rise. But maybe the drug agency is just flip-flopping more these days.

As good as the news is, CAPS All-Star biotech guru zzlangerhans sees enough short-term risk to think Vanda will underperform the market near-term from here.

Vanda hasn't yet established a marketing partnership for [Fanapt], which creates substantial uncertainty about their valuation going forward. Furthermore, the FDA's sudden reversal on approval of a "me-too" anti-psychotic doesn't oblige psychiatrists to prescribe it. 2007 and 2008 have been [replete] with FDA-approved drugs that have failed to sell, and resulting plunging stocks -- see Adolor, Progenics, Zymogenetics, and numerous others.

Shake, rattle, and roll
With these shaking the market this past month, it pays to start your own research on them 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.