3 Stocks Shaking 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 listed three stocks that made some of the biggest upward moves over the past month, which we'll pair 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.

1-Month % change from June 30 to July 30.

As the markets respond to changes in what appear to be better earnings, the S&P 500 has been rallying. So before we get shaken out again, let's see why the CAPS community thinks some of these companies might continue to outperform the market.

A mighty temblor
Sometimes it only takes one investing superstar buying in a company to lead a herd behind him. Beleaguered bond insurer MBIA, which along with peer Ambac Financial (NYSE: ABK) struggles for survival, got a boost when Bruce Berkowitz of Fairholme Capital Management reported he had increased his stake in its business, raising his position to more than 11% of outstanding shares.

Along with a new, larger position in American International Group (NYSE: AIG) as well (24.3% of the company), Berkowitz is betting these beaten up financial stocks are going to be huge winners in the future. There's a certain sense to the AIG bet, considering the backstop provided by the government, but the MBIA situation may not look so clear-cut.

It made a mint during the housing market, but when the subprime market sent it off the rails, MBIA went south with it, losing billions on the securities that backed the mortgages. But it has since restructured itself and finds its corporate segment is flush with $321 million in cash and investments, and a big tax refund is due for the 2009 tax year. The holding company should therefore have sufficient funds to cover its cash needs through 2015 -- even if it doesn't receive any dividends from its insurance, asset management, or advisory subsidiaries.

CAPS member Geofiz says that if it's able to continue negotiating the financial minefield surrounding it (MBIA is involved in litigation that could result in substantial recoveries being assessed, higher than what has been previously recognized), Berkowitz's bet could pay handsome returns.

I was impressed by Bruce Berkowitz's investment in MBIA and in AIG. Yes, huge risk involved in both (especially AIG with the Federal government in the picture). However, these are situations in which there is much inherent value if the financial pitfalls can be negotiated. Downside, obviously, is that either or both become worthless. Upside, equally obviously, is that either or both turn into 10 baggers, much like Peter Lynch's investment in Chrysler way back when. Accordingly, I have placed a small amount of risk money in my personal portfolio in both stocks, and have made the pick here as well.

A speedy opportunity
If you're looking for a reason for Telestone Technologies' big jump last month, look no further than China Unicom (NYSE: CHU), China Telecom, and China Mobile (NYSE: CHL), the Big Three in mobile communications. Each carrier added at least 1 million new 3G users to their networks, with China Telecom adding more than 3 million customers to its mobile user base. They're also customers of Telestone, and as the 3G build-out rolls on, they'll find themselves increasingly needing its products and services.

Ignoring for the moment potential dilution concerns, CAPS member cig2010 says Telestone Technologies is positioned to capitalize on the mobile telecom industry's continued growth.

I like the long term prospects are good for TSTC to take advantage of the wireless and telecom buildout of China's infrastructure. TSTC has unique WFDS products that are in high demand by China's "big 3" wireless carriers.

No laughing matter
Stem cell researcher Cytori Therapeutics got the nod from European regulators to expand its stem cell harvesting technology Celution System, a medical device that extracts and separates stem and regenerative cells from a patient's own fat tissue.

Last quarter it had reported an 86% increase in system sales over the year before and a 9% sequential increase. The expanded use will allow Cytori to offer the system to patients and hospitals while supporting its efforts to gain treatment reimbursement.

That sits well with the CAPS community where 81% of those rating the stem cell specialist believe it will go on to outperform the broad market averages. Let us know on Cytori Therapeutics' CAPS page whether it will be able to harvest greater market share from others in the industry.

Shake, rattle, and roll
With these stocks 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.