Whoa! What Just Happened to My Stock?

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.

The commodities correction is apparently upon us, and with the market having ridden the bubble higher, it's now stumbling alongside them on the way down. Stocks tumbled 130 points yesterday, or 1%, so stocks that went significantly higher are pretty big deals.

New frontiers in investing
While Rovi has nominal competition from Sony's Gracenote, and Yahoo! and Google are potential threats on the horizon -- right now they complement Rovi -- it owns the field of interactive programming data.

Rovi provides the software for interactive channel guides to service providers and consumer electronics manufacturers like Apple (Nasdaq: AAPL) as well as TV manufacturers and Blu-ray and DVD player makers. It also makes content protection software that's included on virtually every videocassette and DVD made, as well as in set-top boxes made by Scientific-Atlanta, Motorola, and TiVo (Nasdaq: TIVO).

With the boom in connected devices, it's little surprise that Rovi's revenues jumped 12% in the quarter generating profits of $0.61 per share, $0.10 better than what analysts had predicted.

CAPS members have been bullish on Rovi's prospects with 84% of those rating it expecting it would be able to beat the broad market averages.

You can add the programming specialist to your watchlist and tune in to the Rovi CAPS page for further insights to its future.

Not an uncommon occurrence
In a market dominated by big box retailers like Best Buy (NYSE: BBY), computer systems and parts purveyor Systemax had a good quarter that saw rising revenues and widening profits. That's actually a big deal for the company, because in addition to its online brand TigerDirect, it also owns the CompUSA and Circuit City brands. Making a go of it in failed brands is a tough road to take, even if they do hold mindshare with consumers, because it's just typically not good thoughts the customers have. That's reflected in the 8% decline it experienced in same store sales for its consumer channel, though the business-to-business route saw a 7% jump in comps.

Still it probably explains why almost 30% of the CAPS members rating Systemax don't hold out much hope for it being able to beat the indexes.

Don't be boxed in on the Systemax CAPS page, let us know what are your thoughts about its future.

Making a connection
May has been a good month for Internet network services provider Level 3 Communications. Then again so was April. And March, February, and January, too. Shares have nearly doubled in value so far this year as the market has been inundated with mobile communication devices and demand for online video increases, thus increasing the need for Level 3's technology.

Content may be king, but without the bandwidth to deliver that content you've got nothing. So it's no secret how important the deal it inked with Netflix (Nasdaq: NFLX) was to its future. VOD will play a key part of the

Now that Level 3 has purchased Global Crossing, CAPS member ryqanderson says it's in the major leagues now: "Just purchased Global Crossing. Existing Fiber grid extends to Latin America. Now, a very large (one of the largest) communications companies."

But you can stay on top of the company's developments by adding Level 3 Communications to the Fool's free portfolio tracker.

Going into orbit
That's why 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.