3 Stocks Shaking the Market

Some stocks are one-hit wonders, making a big splash when they first appear, 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.

Source: FinViz.com; one-month percentage change from May 26 to June 27.

While you were out, the market plunged below the 12,000 level. Though it's since bounced back, it's struggling to stay above that psychological mark. 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
I hope investors in Conn's aren't using Best Buy's (NYSE: BBY) earnings as a proxy for their own company. Conn's current rally coincided with the latest news from its rival. Hey, I like the big consumer electronics retailer a lot, and even own its stock, but Best Buy's earnings, while good, weren't great, and they got a significant boost from the company's big stock buyback.

It's possible the shorts are being squeezed a bit here. Although Conn's days to cover fell from a recent spike, at 19 days, it's still pretty high. (Shorting Fools like that figure to remain below seven days to prevent just such a run on the stock.) CAPS member SharePlanner expected a short squeeze at the end of April: "...pay close attention to Conn's (CONN), which is posting a very nice bullish flag of late, and has 58 days to cover. If the shorts are forced to cover this one, it will be a blood bath for them."

Conn's stock is up 55% during this rally (ouch!). The stock began to move higher before Best Buy reported, but really picked up steam after the latter company released its financials. Interestingly, hhgregg (NYSE: HGG) hasn't had a similar run-up of its own, though it also has a relatively high short interest ratio (12 days to cover). Its shares remain essentially unchanged, while Best Buy's own stock is nearly 13% higher.

Conn's own quarterly results were even less impressive than Best Buy's, with revenue falling, profits narrowing, and guidance for the second quarter disappointing. Unlike Conn's, Best Buy managed to reiterate a bullish outlook for the year.

Let us know on the Conn's CAPS page what you think is driving the stock higher, and whether it can turn its business around.

A surprise reversal
Accusations of fraudulent activity have made Chinese fertilizer maker Yongye International a favorite target for hedge funds and short-sellers. But a recent vote of confidence from Morgan Stanley (NYSE: MS) catapulted the stock higher. Morgan's $50 million shot in the arm, which also bought the investment bank a seat on Yongye's board of directors to watch over the money, encouraged investors to dispel fears that Yongye might suffer any (further?) financial funny business.

That deal makes a certain sense. Allegations with Yongye have always been more smoke than fire, and whatever I might think about the science of fulvic and humic acid as a component of its product, there's at least anecdotal support for it. Yongye itself has said that its wares can increase overall yields of crops by as much as 20%,while also improving product quality.

However, Yongye must still overcome investors' growing lack of trust in Chinese small caps, particularly those that went public via a reverse merger. The laundry list of companies accused of fraud gives investors pause. CAPS member Diagoras believes the fertilizer maker must still prove its business is aboveboard:

Nothing changes the fact that this company is likely a fraud. If anything, now is a good time to short, given that investor sentiment has become more bullish. A low single digit P/E is meaningless if the E part of that ratio is not to be trusted.

Tell us in the comments section below or on the Yongye International CAPS page whether Morgan Stanley's cash vote is enough for you.

Should I stay or go?
After a disappointing quarterly earnings report that sent its stock plunging, boot maker Timberland got kicked higher by VF's (NYSE: VFC) $2 billion buyout offer. The clothing maker, which includes such premium denim names as 7 for All Mankind in its product portfolio, will add Timberland to its outdoors and sports segment, which will now account for more than half of VF's revenue.

Getting Timberland for $43 a share looks like a shrewd move by VF, since the market rewarded it by pumping up VF's stock price, too. And why not? VF's getting a quality brand name that will add some $700 million in revenue to its income statement. The market mercilessly kicked Timberland in the head after rising costs for leather sunk its profits by 30% and inventories jumped higher. But its sales are still growing (up 10%), and comps soared 27%. Timberland still holds plenty of value, for sure.

More than 80% of the CAPS members rating Timberland believe it will beat the market in the months ahead, while 94% of those rating VF see it gaining. Tell us on the CAPS pages of either Timberland or VF whether you think these boots were made for walking higher.

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.