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 180,000-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.
These two stocks both made big moves over the past five trading days, one up, one down:
|
Stock |
CAPS Rating (out of 5) |
Change Past Week |
|---|---|---|
| Chelsea Therapeutics International (Nasdaq: CHTP) |
** |
(32.9%) |
| GMX Resources (NYSE: GMXR) |
*** |
24.5% |
Source: Motley Fool CAPS, % Chg. from Feb. 10 to Feb. 17.
Bad news for biotech
Coming as it did just before Chelsea Therapeutics was to speak at an investor conference, news that the FDA had a lot of questions about its neurogenic orthostatic hypotension drug Northera put a damper on anything else the biotech might have had to say about it. Yet since the real news doesn't really hit until today -- Chelsea got the news ahead of time, so it had to reveal it early -- the market will likely not move much more when the details hit the wire.
Analysts have expressed some surprise, considering the drug is already in use elsewhere around the globe, though that's never really prevented the regulatory agency from going its own way. MELA Sciences (Nasdaq: MELA) faced harsh scrutiny itself from the FDA over its MelaFind cancer detection device despite European regulators approving it. Delcath Systems (Nasdaq: DCTH) earned CE Mark approval in Europe after running into an FDA buzzsaw over its Chemostat chemotherapy system.
Yet drug companies can and do overcome such objections, and the Fool's Brian Orelli is hopeful Chelsea will do so as well since the drug seems fairly safe overall. But All-Star CAPS member and biotech guru zzlangerhans isn't so sure.
[Chelsea CEO Simon Pedder] referenced FDA briefing documents that apparently raised concerns about weakness in the design of the Northera phase III trials, as well as much more troubling "questions" regarding the role of Northera in several deaths that occurred during the studies.
While the validity of the efficacy data for Northera was always questionable, as I have described in detail previously, the significant mortality concerns were not previously described.
Tell us on the Chelsea Therapeutics CAPS page or in the comments section below if you agree with the dour assessment and add the biotech to your Watchlist to be alerted if it's able to overcome the FDA's concerns.
A resourceful opportunity
Oil and gas E&P play GMX Resources had a nice run up last week to be sure, but since the beginning of the month, its shares have more than doubled after it announced it was moving from natural gas to oil and gas liquids.
Considering the inventory glut we're still experiencing in the natural gas market -- even in light of the draw down on reserves over the past week inventories remain well above the five-year averages -- it's becoming a more difficult place to make money. Pricing remains severely depressed, at around $2.50 per million BTUs.
Thus GMX Resources is not the only one on the move. Both Cimarex Energy and Encana (NYSE: ECA) say they will be switching more towards liquids production with less focus on gas.
With 92% of the 180 CAPS members weighing in on GMX believing it will go on to beat the broad indexes, it seems they're willing to wait for it to heat up again. Add GMX Resources to the Fool's free stock tracker and let us know in the comments section below if it will exchange its new higher value for a lower one again in the near future.
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