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3 Stocks Stopping the Presses

By Rich Duprey - Updated Apr 6, 2017 at 9:32PM

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These companies made big headlines -- what does it mean to you?

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 big moves over the past five days.

Stock

CAPS Rating (out of 5)

Change Past Week

Cell Therapeutics (Nasdaq: CTICD)

**

31.0%

Cheniere Energy (NYSE: LNG)

*

51.0%

Sigma Designs (Nasdaq: SIGM)

**

(26.2%)

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

Can't fight this fire
See that "D" at the end of Cell Therapeutics' ticker? That stands for "new issue," and though it will go away, it was assigned because the biotech effected a 1-to-6 reverse stock split as a means of remaining in compliance with Nasdaq listing requirements.

Struck down by the FDA over approval for its cancer drug Pixuvri, Cell Therapeutics shot back up after announcing a licensing deal for its cancer therapy Tosedostat. The roller coaster ride headed back down again, when the FDA again rejected its drug pixantrone. Cell Therapeutics is in crisis mode, which means you can safely ignore the biotech's claim that it will be resubmitting pixantrone to the agency yet again later this year. Third time might be the charm, but "three strikes and you're out" also comes to mind.

And even if the FDA does miraculously agree to approve the drug, pixantrone will face stiff competition from Biogen Idec's (Nasdaq: BIIB) Rixutan and Spectrum Pharmaceutical's  (Nasdaq: SPPI) Zevalin.

Although it's surprising that nearly 90% of CAPS members rating Cell Therapeutics think that it might be able to beat the broad market averages, the two-star rating they've assigned suggests that they correctly think there were better and safer places for your money.

Now that it has a new lease on life courtesy of the reverse split, head over to the Cell Therapeutics CAPS page and let us know whether you think bad news comes in threes.

Going nowhere?
Fresh off getting approved to become the first exporter of liquid natural gas in more than 40 years, Cheniere Energy said it wanted to take a stake in a Lithuanian terminal. The government approved Cheniere's export request, giving its Sabine Pass terminal in Louisiana the ability to export worldwide up to 803 billion cubic feet of natural gas each year. Lithuania happens to be one of export sites, and the government there says it would accept as much as a 20% investment in the terminal if it was offered, allowing it to supply Lithuania with up to 2 billion cubic meters of gas per year.

As positive as the results seem, not everyone is sold on Cheniere as a good investment yet -- both terminals, for example, still need to be built. Still, some analysts think Cheniere can export liquefied natural gas to Europe more efficiently than new terminals in Australia can. Currently, LNG projects down under consist of two major ventures -- the North West Shelf, operated by Woodside Energy, and the Darwin, a joint venture between Bechtel and ConocoPhillips (NYSE: COP). The majority of Australia's LNG exports -- fully two-thirds -- goes to Japan.

With 82% of CAPS members saying Cheniere can beat the Street, it's tempting to give the company a pass. But like Cell Therapeutics, its low CAPS rating is a warning sign. Let us know in the comments section below whether you think the Cheniere can export its stock to a higher level.

Chipping away at value
For chip designer Sigma Designs, turning revenues into profits has proved as difficult as spinning straw into gold. The promises of better times ahead seem just as ephemeral, too. Last year, it was able to generate $1.1 million in net income, or $0.04 per share, but this year's effort was a bust, as Sigma lost $5.4 million, or $0.18 per share.

Management was "disappointed," to say nothing of the market, but they're looking for the rest of the year to turn around. Analysts, investors, and the market really shouldn't have been so surprised by the developments, though. We knew early on that the first half of the year was going to be soft, and Sigma was already saying to expect the back half of the year to be better, so dropping the stock as much as it did suggests an overreaction.

Sigma has plenty of opportunities before it, including IPTV box designs and deals with Motorola Mobility (NYSE: MMI) and Cisco. Highly rated CAPS All-Star Calinvestments is looking for a new bull market to pull Sigma ahead: "This is a small/mid cap high growth stock that should outperform the S&P during the bull market."

Add Sigma Designs to your watchlist to see whether it can design a new growth story.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Sigma Designs, Inc. Stock Quote
Sigma Designs, Inc.
SIGM
ConocoPhillips Stock Quote
ConocoPhillips
COP
$71.11 (-0.21%) $0.15
Biogen Inc. Stock Quote
Biogen Inc.
BIIB
$223.92 (-2.01%) $-4.60
Spectrum Pharmaceuticals, Inc. Stock Quote
Spectrum Pharmaceuticals, Inc.
SPPI
$1.37 (-13.29%) $0.21

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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