2011年7月18日星期一

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.

While you were out, the markets have staged a remarkable recovery recently, enjoying its best week last week in almost two years. So 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
Sure, Australian biotech Genetic Technologies has doubled over the past month, but over the past year, it's gained nearly 1000%, rising from a literal penny stock to over $10 a share. It's this type of gain that penny stock investors typically look for, though GT is the exception more than the rule.

Yet there's still a lot of risk here that the company could lose all of those gains. Genetic Technologies is the exclusive Australian licensee of Myriad Genetics' BRCA1 and BRCA2 patents, genes that indicate breast cancer susceptibility. Earlier this year a judge ruled that companies can't patent isolated DNA sequences since they occur in nature, and last week, Genetic Technologies requested that its shares not trade on the markets as it considers raising capital.

While it said it didn't expect the halt to last past Thursday, the stock has yet to trade and no further explanation has been forthcoming. Investors have a right to be fearful. Significant dilution or a significantly underpriced offering could cause the stock to plummet from its heights. Stopping a stock from trading for a day or two is one thing. For a week is just odd.

With just 29% of the CAPS members rating Genetic Technologies to outperform the broad market averages there's obviously deep skepticism here. But add it to your watchlist to keep an eye on what happens next.

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