The Dow Jones Industrial Average is turning this winning streak into a marathon. At 10 days, Joe DiMaggio’s 56-game hitting streak isn’t in any danger yet, but the index is still putting together an impressive string of gains.
Though unwarranted, the three stocks below held a party of their own, but please resist the urge to high-five everyone in the cubicles next to you. Smart investors won’t celebrate until they know why their stock surged because without a fundamental basis for the bounce, these stocks could just as quickly make the return trip down.
|Sinovac Biotech Ltd.(NASDAQ:SVA)||17.9%|
|Joe’s Jeans Inc (NASDAQ:JOEZ)||9.9%|
|Bazaarvoice Inc (NASDAQ:BV)||9.3%|
Pearls before swine
Although they sound similar, the outbreak of foot-and-mouth disease among pigs that China just confirmed occurred in the southern province of Guangdong is not the same disease as the vaccine for hand, foot, and mouth disease being pursued by Sinovac Biotech Ltd.(NASDAQ:SVA). Although the same virus family causes both diseases, they are not able to crossover between species from livestock to humans.
Sinovac Biotech Ltd.(NASDAQ:SVA), though, still had good news to report in that it said a late-stage trial of its experimental vaccine for the illness met the main endpoints of a study for preventing the infection in infants between the ages of six and 35 months with Enterovirus 71 showing 95.4% efficacy. According to reports, more than 1 million cases have been identified in China over the last five years, with some 500 to 900 people dying annually.
Thus, although the vaccine may prove effective, the market opportunity may not be as great as it initially appears, which probably explains why the stock initially soared some 50% on the news, only to scale back the gains to a high-teen level. Since it’s a geographically isolated company with a niche — albeit successful — product, it doesn’t necessarily translate into a good stock for investors to go after.
There was no particular reason for Joe’s Jeans Inc (NASDAQ:JOEZ) to suddenly perk up yesterday. There was no news on the wires, it has no real short sellers to speak of, it already reported its earnings last month, and it announced a couple of days ago that it would participate in an investor conference next week. In short, this was one of those situations where some ephemeral mutation in the market caused the stock to spike.