Why Did My Stock Just Die?

Your stock just took a nosedive -- but don't panic. First, let's see whether it had good reason to fall. Sometimes, panic-fueled drops can make excellent buying opportunities. Here's the latest crop of cratered stocks that could provide a possibility for profit.

Giving it a full week of gains and starting off the second half of the year, the markets added another 168 points, or 1.4%, to close over 12,500 points on Friday. So stocks that went down by even larger percentages are pretty big deals.

The devil's in the details
Well, that ruling didn't go according to plan. Iconic camera name Eastman Kodak was counting on the International Trade Commission to get both Apple (Nasdaq: AAPL) and Research In Motion (Nasdaq: RIMM) to cry "Uncle!" but instead the organization kicked the can further down the road.

A judge previously ruled that a Kodak patent was invalid, and the body asked the judge to reconsider his decision, though it took no position itself. The ITC also said that at least while in non-flash modes, iPhones and BlackBerrys don't infringe the patent, either. The one area where it did find the phonemakers infringed was in certain color patterns.

Kodak is using its patents for previewing pictures on digital cameras to extract royalty payments from mobile-phone makers. Samsung and LG Electronics already gave in and paid Kodak off, but the iPhone and Blackberry makers have thus far refused to yield. Apple, in fact, turned around and sued Kodak for infringement of its own, but that case isn't going so well.

Earlier this year, Kodak's CEO was going around saying he thought Apple and RIM would fork over $1 billion in a settlement rather than risk an ITC ruling against them, and maybe they will now that a full decision has been delayed until next month or later. But it doesn't change the fact that Kodak is in a position where it must win this case or risk having its sketchy turnaround plan fall apart.

Lots of investors still give Kodak the benefit of the doubt that it will succeed in making something out of the debris left behind from its failure to make a timely switch to digital. Some 60% of CAPS members rating it think it can still outperform the broad market averages, but TrojanFan's not one of them, believing it has a lot of structural problems that leave it overexposed: "They are facing a pretty significant maturity wall in 2013 and if they don't meet it, their amended and restated credit facility (due in 2016) will get probably get accelerated on them. There are numerous restricting covenants that got put in place as a result of their last amendment and extension."

Give us a snapshot of your views on the Eastman Kodak CAPS page, and tell us whether it will ultimately prevail in court.

Knowledge is power
In today's economy, knowing how consumers will respond to pricing initiatives or what their tastes and preferences are should be a lucrative business niche, and it's one DemandTec has been serving. Its software-as-a-service technology lets retailers gain consumer insights that help them plan better, technology that both Target and Wal-Mart (NYSE: WMT) have used. Those retailers accounted for 21% and 11%, respectively, of 2011 revenues.

Yet quarterly revenues results came in below analyst expectations, although they jumped nearly 25% from the year ago period. Losses were wider than anticipated, even after excluding one-time restructuring charges.

With a growing roster of big-name clients -- dollar-store chain Dollar General recently signed on -- and some smart acquisitions such as its purchase of predictive analytics software provider M-Factor earlier this year, it seems the market's reaction was one of excess. I've gone and rated DemandTec to outperform the indexes, but let us know on the DemandTec CAPS page whether you think it will be able to predict when it will turn its business around, and follow its progress by adding it to the Fool's free portfolio tracker.

Even in the East
I wouldn't read too much into the drop by China Real Estate Information, either. The paring back of the stock came after two days of solid gains where it rose 11% and 13%, respectively. The pullback has the earmarks of profit-taking for a stock that's recovered some of the big losses it experienced over the past year. CREI is still down 43% from its 52-week high.

Despite the Chinese government's efforts at cooling off its housing market, prices continue to rise, up more than 5% year over year. That might not seem a whole heckuva lot considering the torrid pace it had been on, but considering the government is giving its all to tamp down growth, the fact that prices are still going up is significant.

China Real Estate Information is a subsidiary of Chinese property manager E-House, whose own stock is down more than 50% from recent highs. CAPS member Maxyld20 is looking for CREI to gain again, based on the strength of its partnership with Internet portal Baidu (Nasdaq: BIDU): :CRIC has had the responsibility of running the Real Estate advertising and channels for the very successful Baidu network. This stock was issued to formalize a 3 year contractual relationship between the 2 entities."

Follow along on its development by adding it to your watchlist and see whether the government's plan to kneecap housing will succeed.

Ready for a resurrection
Just because your stock has taken a beating, that doesn't mean it's going to roll over and die. Markets are known for overreacting. A closer look on Motley Fool CAPS at what's happened to your stock can give you an edge over other investors who just react to the market's lead. You can decide for yourself whether it's ready to come back from the dead.