5 Stocks in a Tailspin

Individual stocks can surge 10%, 25%, or even higher in a short period of time. And they can fall just as far, just as quickly. For example, shares in MGIC Investment tanked 30.6% last Thursday, when the company said it would defer an interest payment on one of its debt instruments.

Big drops in share price can sometimes signal material defects or new risks. But at other times, they're simply pullbacks along with the larger pessimism facing the market today. Fortunately, we have Motley Fool CAPS, a great resource to help us understand the larger picture behind big price drops.

Is the sky falling?
CAPS contains more than just the crowd's opinions. Its best-performing members' votes count more in shaping each company's rating than do the picks of their poorer-performing peers. That way, investors can intelligently use the collective wisdom of more than 130,000 CAPS members to make better decisions.

We'll use CAPS' handy stock screening tool to quickly zero in on companies that have been slashed by at least 25% in the last four weeks, and which have market caps greater than $100 million and a beta of less than 3. If you want to run this screen for yourself, please do -- just keep in mind that its results will update with the market.

Source: Motley Fool CAPS. Price change Feb. 20 through March 17.

Atlas Pipeline Partners
Concern for tight debt agreements with banks, pressured liquidity, and high leverage has Moody's considering a possible downgrade on natural gas player Atlas Pipeline. The company reported a net loss of $456 million in its most recent quarter, with adjusted total revenue falling 30.8%, and natural gas and liquids revenue dropping 50.5% to $160.4 million. But while volatile markets are squeezing some oil and gas producers, others, such as Chesapeake Energy (NYSE:CHK), aren't complaining about today's low gas prices. In CAPS, slightly more than 91% of the 418 members rating Atlas expect it to outperform the market.

Humana
Humana and other health-care companies such as UnitedHealth Group (NYSE:UNH) have been hammered lately, as companies with significant exposure to Medicare Advantage business wait to see whether changes to reimbursements will shrink their revenue. With the Obama administration considering health-care reform in the midst of a recession, this industry still faces considerable uncertainty. Shares of Humana have risen from a larger drop as rumors a possible acquisition by Aetna circulate, but many observers downplay the possibility of a merger. At this point, nearly 91% of the 502 CAPS members rating Humana believe the stock will beat the S&P.

Harvest Energy Trust
Canadian energy trusts like Harvest Energy and Pengrowth Energy pay large monthly distributions, and they may continue to do so until the Canadian tax code changes in 2011. But the significant drop in oil and gas prices has Harvest Energy feeling the pinch. The company has deferred some capital spending and reduced its monthly distribution to conserve cash. Roughly 96% of the 889 CAPS members rating Harvest Energy say it will beat the market.

US Steel & Stillwater Mining
As steel demand slumps, Moody's has recently warned of a possible downgrade for US Steel's credit rating. Meanwhile, a recent negative outlook from steelmaker Nucor sent a shock through shares of peers throughout the industry. While raw-material miners like Cliffs Natural Resources ride out the downturn, many investors have high hopes for China's role in boosting demand, with its government mulling additional stimulus efforts to bolster the nation's infrastructure.

On the precious metals front, platinum group metals producer Stillwater Mining has been taking it on the chin as decreased demand from automakers hurts the price of platinum and palladium. While each company relies on different industries, both US Steel and Stillwater Mining have been suffering as recent demand wanes. But many investors like both companies' cheaper shares and long-term prospects. Stillwater earns the bullish confidence of 92% of the 405 CAPS members rating it, with US Steel spurring optimism in 94% of its CAPS partisans.

Ultimately, whether or not you believe any stock deserves to fall, your own research is more important than any collective opinions. CAPS can help you quickly focus your due diligence, and even point out potential pitfalls you may not have seen, but the rest is definitely up to you, Fool.

Add your take on these or any of the more than 5,300 stocks that 130,000-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.