3 Stocks Stopping the Presses

You saw the headlines. You know your stock price made a big move. But what does that portend for your investment's future?

By pairing the latest news with the collective wisdom of our 170,000-strong Motley Fool CAPS investing community, we might be able to discover whether your stock's latest exploits are a short-term hiccup -- or the start of a much bigger trend.

The following stocks have all made major moves over the past five days:

Source: Motley Fool CAPS; % change from May 11-18.

Can't fight this fire
First bromine maker Gulf Resources had short sellers on the run as its earnings release approached, sending the stock soaring. Now the company's proved that those shorts had good reason to run. First-quarter profits rose 80% and revenue increased 53%, all thanks to rising bromine prices.

We noted last October that Gulf was raising prices because of rising demand. So was U.S.-based Albermarle (NYSE: ALB), which uses the specialty chemical in fire retardants. There was a bit of foreshadowing of Gulf's results when Albermarle reported its own earnings last month, posting a 20% increase in revenue that led to a 67% jump in earnings. With bromine prices nearly double their year-ago level, Gulf's results may have been a foregone conclusion.

Unfortunately, Gulf Resources still labors under a cloud of suspicion, amid charges of financial impropriety. The stock once traded as high as almost $12 a share, but currently sits 63% below that point, even with the generous bounce it's received this week.

With 91% of the 467 CAPS members who've rated Gulf Resources predicting it will outperform the broad market averages, it seems that our community believes this company will put the wisp of scandal behind it. But its two-star CAPS rating also suggests that our investors think there are better places for your money. Head over to the Gulf Resources CAPS page and let us know whether the allegations are just bromides that the company will be able to surmount.

A stiff backbone
Investors in "bone spackle" maker Orthovita have been waiting for years for someone to take note of the special opportunity its innovative product provides. Outpatient usage has grown at the expense of the margins that an inpatient setting would provide, and despite FDA approval for new indications for Cortoss -- a paste that mimics the properties of weight-bearing cortical bone, helping to make fractured bones stronger -- and a close manufacturing relationship with Kensey Nash (Nasdaq: KNSY), its stock has remained mired in the low single digits.

Apparently, medical device maker Stryker (NYSE: SYK) saw the company's potential. It will scoop up Orthovita for $316 million in cash, or $3.85 per share. That's a 41% premium to where it traded before the deal was announced. I would've thought the company was worth more than that, but since it was stuck with its low-margin business, I'd rather the company realize its inherent value now than wait for practitioners to wake up to the possibilities later.

CAPS member BACnumber1 couldn't have timed it much better, arguing late last month that with an aging population, Orthovita's specialty in spinal was sure to offer huge growth potential. He considered it his best long-term pick, if by "long term," he meant three weeks:

Because it will only grow. Think about it. With the baby boomers getting older, and the life expectancy rate going up, there will be a much greater need for healthcare in general. But I like this company because it specializes in spine surgery, and people with crooked, bent spines is an epidemic that is only going to grow. Even with the youth, teens and adults playing video games tend to have bad posture, thus leading to spinal problems.

Let us know in the comments section below whether you think the deal will go through, or what your own best long-term CAPS pick might be.

Just patent leather
It seems Lazarus is still with us. Eastman Kodak won a round in its patent infringement battle against Research In Motion (Nasdaq: RIMM) and Apple. Investigators for the International Trade Commission sided with Kodak's argument that the two cellphone makers violated Kodak's patents on previewing images taken on the built-in cameras. That's right: If phone makers want to let you take a picture and look at it, Kodak says it deserves to be paid for the right to include that feature.

Although a patent attorney recently excoriated me for expounding on issues I apparently know nothing about, I maintain that such obvious features shouldn't be patentable. As I've stated before, I believe that Amazon's "one-click checkout" and MercExchange's ability to bludgeon eBay over its "Buy It Now" feature are patently offensive abuses of the patent system.

Kodak will live on a little longer, but there's nothing forcing the ITC to go along with its investigators' conclusions. Whether or not the agency agrees with its fact-finders that no harm would arise from banning the importation of BlackBerrys and iPhones remains to be seen.

CAPS member Red777aetrof agrees that much of Kodak's business model is dying a slow death, but he suggests you'd be remiss not to consider the good that can come out of its printing business:

alot of noise covers up the progress making in printing. commercial inkjet will do to offset printing what digital did to film. in consumer inkjet, it's a huge annuity profit pool, where Kodak has a fundamentally superior business model by attacking the competitors where they cant respond (because they need to protect their ink profits). Rest of business is dying or dogs.

Add Eastman Kodak to your watchlist to see whether it can still patent a growth story.