5 Stocks Ready to Bounce Back

However hard the market slams a stock, there's always the chance it'll bounce right back. We'll consult our Motley Fool CAPS community to find shares on the rebound, examining one sector of the economy in search of companies with rising CAPS ratings.         

Among the more than 1,500 stocks listed under financials in the CAPS screener, we've unearthed a few with high five-star ratings. That means some of our 135,000 CAPS members are confident that these stocks will beat the market in the months ahead. Let's see what members are saying about these.

Company	CAPS Rating Today	Recent Price	52-Week Price Change	Estimated Long-Term Growth Rate
Berkshire Hathaway (NYSE: BRK-A  )	*****	$100,310	(18%)	5%
CapitalSource (NYSE: CSE  )	*****	$4.11	(61%)	12%
Manulife Financial (NYSE: MFC  )	*****	$24.24	(32%)	13%
NYSE Euronext (NYSE: NYX  )	*****	$27.40	(35%)	12%
Universal Insurance (NYSE: UVE  )	*****	$5.38	31%	NA

Source: Motley Fool CAPS; Yahoo! Finance.

Even though the average company in the financial sector lost about 25% of its value over the past year, there were still some notable high performers, such as Ocwen Financial, whose stock more than doubled, or Walter Investment, whose shares jumped after it was spun off from Walter Energy. Let's take a closer look at why investors might think some of these companies won't be jumping from the frying pan into the fire.

Some spring in its step
We've become so used to Warren Buffett guiding Berkshire Hathaway with a steady hand that when shares lose 45% in a year, it comes as a big shock. Now whether that kind of return is cause to call him an "idiot" probably says more about the commenter than about Buffett.

Buffett has never promised anyone straight-line growth and has been willing to accept some big drops in value if it meant being able to get better prices on some of the market's best values. And that cat-like ability to land on his feet is starting to fill his pockets with coin. His $5 billion bet on Goldman Sachs (NYSE: GS  ) and his no-brainer buy of General Electric (NYSE: GE  ) will undoubtedly be worth the wait for investors.

Those who put their money with Buffett understand it's a marathon he's running, not a sprint, and while analysts heckle him for his failure to engage in hyperactive trading the way they do, investors like CAPS member Dobbes realize patience is the key.

Buffett has made a number of acquisitions in this recent downturn. That's what value investors do, buy at a discount and hold. Traditionally they do best in the first phase of an economic cycle (now), which is what signals my entry, but I have confidence Berkshire can beat the S&P routinely.

Action for action's sake
Of course, hyperactivity does have its benefits. Just ask NYSE Euronext, which generates about 10% of its revenues from trading in U.S. equities. While volume activity is down from the beginning of the year, when the markets may have hit their inflection point, the trading volume of 4.8 billion shares a day in July points to very robust bullishness. After all, last year an average of 3 billion shares a day traded hands -- a record.

Yet it's computer trading programs generated by institutional investors that account for as much as 70% of all share volume in the U.S. The dominance of programmed trading has helped foster hyperactivity, and CAPS member emek says NYSE Euronext will benefit.

This is an era of trading instead of investing. This can only be good for NYX. Valuation is not very cheap, and there is hard competition. But revenue opportunities combined with low-risk makes NYX a good stock to invest in (not trade!)

The ball's in your court
There are many factors that go into whether a stock is a buy or sell, so it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Head over to CAPS today and share your thoughts on these stocks.