Resist the urge to high-five everyone in the cubicles next to you. Your stock may have just strapped on a rocket pack and taken off for the moon, but smart investors won't celebrate until they know that upward leap was justified. Without a fundamental basis for the bounce, these stocks can quickly make the return trip down.

Is now the time to lock in profits, or is this just the first step toward even higher valuations down the road? Let's examine several stocks that just hit the afterburners, and see whether they're truly headed into orbit.


CAPS Rating
(out of 5)

Yesterday's Change

BroadSoft (Nasdaq: BSFT) * 36.10%
China Security & Surveillance (NYSE: CSR) ***** 27.80%
8x8 (Nasdaq: EGHT) **** 14.96%

In yet another wild swing, the markets roared ahead 124 points yesterday, or more than 1%, as investors set aside other concerns. It's a big turnaround, and appropriate for a month known for madness, so stocks that went up by even larger percentages are bigger deals still.

New frontiers in investing
IP-based communications software provider BroadSoft surprised everyone when its earnings report trashed analyst expectations. With licensing revenues doubling and service revenues jumping 70%, the company that operates various VoIP services and helps businesses interact with their customers and clients via Web-based protocols generated profits of $11 million in the fourth quarter. Full-year profits were a 180-degree turnaround from the loss it recorded in 2009.

Verizon (NYSE: VZ) represents a growing portion of BroadSoft's revenues, accounting for 15% of the total, up from 10% in the year-ago period. As telecoms transition to 4G networks, BroadSoft ought to find more business for its software solutions, but it's also going to increasingly run into free, IP-based communication tools like Skype, JaJah, Vonage (NYSE: VG), and Google's (Nasdaq: GOOG) Voice technology.

The kind of growth it experienced was presaged by the experience of 8x8, which saw revenues grow 12% last quarter as the burgeoning VoIP market expanded. It's been building support by integrating VoIP, fax, Web conferencing, and chat into one solution for small and medium-sized businesses, and is untethering executives from their desks by creating an app for the iPhone and Android platforms that positions the landline on these smartphones so customers feel they're calling the users' office, when it's really their cell.

The soaring stock price at BroadSoft has many, like CAPS All-Star brightsideLP, thinking shorts got caught in a squeeze. Indeed, 90% of those rating the software specialist think it will ultimately underperform the broad market averages, but you can dial in on the BroadSoft CAPS page and let us know if you think this run-up means it's time to disconnect.

Add 8x8 to your watchlist to ensure you stay up to date on the stock.

High-wire act
While many are attributing the surge in China Security & Surveillance's stock price to renewed talk about its chairman taking the company private, similar to China Fire & Security, it didn't hurt that China megacity Chongqing is planning a massive security camera upgrade that will involve installing 500,000 surveillance cameras by 2012 to keep an eye on its people. The cameras are ostensibly to be used be for crime prevention, emergency controls, and rescue operations.

The surveillance technology firm remains a CAPS favorite, with 98% of those rating CSS believing it will beat the Street. You can keep tabs on China Security & Surveillance by adding it to the Fool's free portfolio tracker.

Going into orbit
It pays to start your own research on these stocks on Motley Fool CAPS, where you can read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from the stock's CAPS page. Then you can decide for yourself whether your stock's headed for reentry, or off to infinity and beyond.