Are Any of These Market Movers Worth Buying?

Brian is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Despite a very volatile trading day, there were several stocks that moved higher on key developments. However, the key developments were all speculative, leaving several questions unanswered. With that being said, I am looking at the four top market movers on Friday and the news that created the movement.

Company

Ticker

Loss

CombiMatrix Corporation

(NASDAQ: CBMX)

336.55%

Uni-Pixel

(NASDAQ: UNXL)

18.04%

JinkoSolar Holding

(NYSE: JKS)

13.59%

Groupon

(NASDAQ: GRPN)

22.97%

  • CombiMatrix Corporation posted the largest one-day gain I’ve ever seen, after a pair of studies published in the New England Journal of Medicine favored chromosomal microarray analysis over traditional karyotyping for genetic prenatal diagnosis of stillbirths. This study may favor CombiMatrix’s theory but in no way validates such a large move. CombiMatrix is a $9.2 million company, after the gains, and therefore would move on little news. I am not suggesting that this company doesn’t have a real technology, but I’d be careful and avoid buying any stock with such a valuation that moves to this degree.
  • Uni-Pixel rallied on Friday after announcing a multi-million dollar preferred price and capacity license agreement to introduce products with its UniBoss-Based touch screens. The deal also has the ability to extend into third-party distribution chains and other manufactures. Therefore, the license appears to be a win for the company. My only concern is that we don’t know who the partnership is with, Uni-Pixel says a “major PC maker,” implying a company such as Dell, but it is hard to say. Therefore, I wouldn’t base an investment solely off this news, as we don’t know the partner.
  • JinkoSolar has remained one of the more undervalued companies in the market, in part due to its balance sheet woes and also due to the struggles of the solar space. However, on Friday the company announced a $1 billion five-year financing deal that will help it expand oversees and should help the company manage its massive debt load. As a result, with this sense of security, I think Jinko could be a buy, with further due diligence. My only concern is that it’s hard to predict the demand of this space, and JinkoSolar continues to post mounting losses.
  • Groupon saw a classic short squeeze after rumors circulated that technology giant Google might be looking to acquire the troubled deal company. Back before Groupon decided to go public Google famously made a $6 billion offer for the company. Looking at the fundamentals and metrics of this company, there might actually be some substance to the rumors. Groupon could be purchased for about two times sales, and with Google’s network it could possibly grow faster. However, I would not base an investment decision on this rumor alone. Groupon has seen an epic decline of 75% in the last year, and all of the problems that led it lower still exist. This is a stock that could change directions very quickly.

As you can see, there are holes in all of the developments that led these stocks higher on Friday. These were all stocks pushed higher by speculation and unclear catalysts, making them somewhat risky. The only one that appears to be deserving of the move was JinkoSolar, because its news was company changing, but many questions still remain with the company’s future. Therefore, I would take time and perform due diligence into the fundamentals of all the companies, deciding on a good entry if interested in any of these stocks as an investment. Because I don’t see anything to entice such movement (except JinkoSolar), and all of these stocks could easily trend lower. 


BrianNichols has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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