Even on the market's worst days, buyout news and other short-term forces can send individual stocks up by 10%, 25%, even 50%.
For example, shares of cosmetic-product and breast-implant maker Mentor jumped 89% when Johnson & Johnson announced it would pay nearly double the previous closing price per share to acquire the company.
But beyond less predictable events like that one are stocks with fundamentally compelling reasons for recent momentum. The trick lies in finding them -- and that's where Motley Fool CAPS comes in.
The story behind the story
CAPS is no crowd of lemmings. Its best-performing members' opinions do more to shape each company's rating than the picks of their poorer-performing peers. Let's use the collective wisdom of more than 120,000 CAPS members to filter out the noise and find companies offering strong momentum.
We've used CAPS' handy stock screening tool to quickly zero in on companies with a stock price increase of at least 25% in the past four weeks, a market cap of greater than $100 million, and a beta of less than 3.
Here's a sample of stocks our CAPS screen returned:
Company |
CAPS Rating
|
4-Week |
---|---|---|
Kinross Gold |
**** |
41.4% |
Newmont Mining |
**** |
27.8% |
Force Protection |
*** |
42.7% |
Source: Motley Fool CAPS. Price return from Oct. 31 through Nov. 28.
Follow the yellow bricks
Many precious-metals miners, including Kinross, Newmont Mining and Gold Fields
Kinross has also been taking advantage of other companies' debt struggles. It made agreements with Teck Cominco
Many investors favor gold stocks like Kinross as a hedge against inflation, particularly when the economy gets rattled to the bone. In CAPS, 96% of the 1,280 members rating Kinross expect it to outperform the market.
It's the bomb
Force Protection and fellow defense contractors Boeing
New business keeps rolling in. Force recently received multiple Buffalo vehicle orders, including its first from the United Kingdom. The Canadian government also gave Force Protection a vote of confidence by placing a second order for Buffalo and Cougar vehicles. Since the company's blast-protected vehicles help shield troops from improvised explosive devices -- the highest source of fatalities and injuries in Iraq -- a large number of vehicles are already used in the country, and the company has the potential to sell more for deployment in Afghanistan.
In addition to ongoing service, spare-part, and repair revenues, the additional future revenue opportunities for Force Protection have many investors feeling more bullish these days. Roughly 92% of the 747 CAPS members rating Force Protection expect the company to beat the market.
And you?
What's your story? Whether you buy the tale of a stock that's soaring or souring, your own research is more important than collective opinions. But these collective opinions can make your due diligence a whole lot easier.
Add your take on these or any of the nearly 5,400 stocks that our 120,000-plus members have covered in Motley Fool CAPS. It's totally free to be a part of the community, and the payback is more than worth it.