3 Stocks Bucking the Downtrend

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Even on the market's worst days, buyout news and other short-term forces can send individual stocks up by 10%, 25%, and even 50%.               

For example, shares in Palm (Nasdaq: PALM) rose nearly 34% after the company made a big splash at the Consumer Electronics Show with the release of its new Pre smartphone and a new mobile operating system.

But beyond less-predictable events like that one are stocks with fundamentally compelling reasons for recent momentum. The trick is to find those stocks. 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 125,000 CAPS members to filter out the noise and find companies offering strong momentum.

We'll use 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.

Below is a sample of stocks our screen returned. If you'd like, run this screen yourself; just keep in mind that results will be updated as the market changes.

Company	CAPS Rating (out of 5)	4-Week Price Change
Corning (NYSE: GLW)	*****	26.6%
TASER International (Nasdaq: TASR)	****	28.8%
Morgan Stanley (NYSE: MS)	**	37.6%

Source: Motley Fool CAPS. Price return from Dec. 12 through Jan. 9.

Glass half full
The last six months have been rough for Corning's shareholders. The stock got creamed last fall when it became apparent that LCD TV makers were oversupplied, leading to pricing pressure and lower demand for Corning's LCD glass. Yet, despite the weak economic climate, the company recently reported that retail sales growth for LCD TVs was strong in October and November in several overseas markets, and it anticipates possible increased demand in 2009. To better align the company with the current economic climate, it plans to tighten up capital spending for 2009.   

But Corning isn't tapping the brakes across the board. Hemlock Semiconductor, a joint venture between Dow Corning -- which is owned 50/50 by Dow Chemical (NYSE: DOW) and Corning -- and two Japanese companies, plans to make billion-dollar investments in solar technology to boost its production capacity while most other companies cling tight to capital in a rocky market.

Additionally, some CAPS members and even Mad Money man Jim Cramer are bullish on potential in Corning's fiber optic segment, as the company's partnership with Verizon (NYSE: VZ) and other opportunities to build out communications infrastructure bode well for future growth. Today, more than 97% of the 3,126 CAPS members rating Corning expect it to outperform the market.

Don't Taze me, bro!
Stock in TASER International has always been tough to own due its endless struggles with public relations and legal liabilities over TASER stungun-related deaths. But beyond the wild price swings driven by numerous trips through the good news, bad news cycle, many CAPS members are bullish on the company's increasing international reach, lack of debt, and attractive new product debuts in a market with little competition.

Momentum has swung in the positive direction in the last month as TASER announced a couple of favorable rulings in some court appeals over a TASER injury case. TASER also kicked off the New Year by announcing several new sales orders from law enforcement agencies in the U.S. and abroad for its stun guns. The company expects the new orders to help bring revenue to $25 million in the just-completed quarter.

There are other reasons to believe that 2009 may be better for the company as well -- tough economic times can lead to higher crime rates, creating more demand for defense-related items like TASERS or guns from Smith & Wesson (Nasdaq: SWHC). After the stock took a beating in 2008, nearly 93% of the 1,089 CAPS members rating TASER International expect it to beat the market going forward.

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 125,000-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.

Beginning Jan. 12, 2009, Fool co-founder David Gardner, Jeff Fischer, and their Motley Fool Pro team will accept new subscribers to their real-money portfolio service. Motley Fool Pro is investing $1 million of the Fool’s own money in long and short positions in a range of securities, including common stocks, put and call options, and exchange-traded funds (ETFs). They also incorporate proprietary CAPS "community intelligence" data into their research. To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.