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 in Delta Petroleum (Nasdaq: DPTR ) rose 32% when the company received drilling approval for four more natural gas wells in Washington state.
But beyond less-predictable events like that one are stocks with fundamentally compelling reasons for recent momentum. The trick lies in finding 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 140,000 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 30% 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 that our screen returned. If you'd like, run this screen yourself -- just keep in mind that results may change as the market does.
|
Company
|
CAPS Rating
(out of 5)
|
4-Week
Price Change
|
|
Allis-Chalmers Energy
|
*****
|
42.4%
|
|
Trico Marine Services (Nasdaq: TRMA )
|
*****
|
30%
|
|
Coeur d`Alene Mines (NYSE: CDE )
|
****
|
39.9%
|
|
Northgate Minerals (NYSE: NXG )
|
****
|
31.4%
|
|
Radian Group
|
**
|
37.6%
|
Source: Motley Fool CAPS. Price return from Aug. 14 through Sept. 11.
Trico Marine
Trico Marine's shares have been climbing steadily since it announced a 47% jump in revenue in its second-quarter earnings, which was helped by growth in its subsea service businesses. Trico predicts that a new two-year contract with Petrobras (NYSE: PBR ) will increase revenue in Brazil, while new contract extensions boost revenue in China. It sits on a strong backlog and just added $50 million in fresh contracts, and it's predicting strong revenues again in the third quarter.
But like some CAPS members have brought up, the company has liquidity challenges that it's working to mitigate as it continues to pay down debt. At the end of the quarter, the company had $35 million in cash and $705 million in total debt and was looking to refinance debt to satisfy a $100 million principal payment it has coming due in January 2010. Even with the debt risk, nearly 96% of the 319 CAPS members rating Trico Marine expect it to outperform the broader market.
Coeur d'Alene Mines
Precious metals prices have had a sharp run in recent months, boosting shares in gold producers like Newmont Mining (NYSE: NEM ) and silver producers like Coeur d'Alene Mines and Hecla Mining (NYSE: HL ) . Some CAPS members believe that Coeur d'Alene Mines and other metals producers could benefit from an increasing flight-to-safety mentality among investors, as the U.S. government increases its debt load and other fundamental drivers supporting higher gold and silver prices emerge around the world.
And it doesn't hurt that the company reported a breakout second quarter, which surpassed analysts' expectations and earned it a couple of credit ratings upgrades from Standard & Poor's Ratings Services. Its two new mines, the San Bartolome in Bolivia and the Palmarejo in Mexico, contributed to 58% of total silver production in the quarter, and it expects the continuing ramp-up of Palmarejo to increase production and cash flow. Coeur d'Alene sits on $80 million in cash, and it reduced its total debt by 37% during the first half of 2009. At this point, 95.2% of the 1,254 CAPS members rating Coeur d'Alene Mines are bullish.
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 5,300 stocks that our 140,000-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.
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