However hard the market slams a stock, there's always the chance it'll come bouncing right back. Let's consult the Motley Fool CAPS community to find shares on the rebound, examining one specific sector of the economy in search of companies with rising CAPS ratings.
Among the more than 500 stocks listed under basic materials in the CAPS' screener, we've unearthed a few with high five-star ratings. Those accolades mean our 140,000 CAPS members are confident that these stocks will beat the market in the months ahead, but let's see what members are saying about the five below:
|
Company
|
CAPS Rating Today
|
Recent
Price
|
52-Wk Price
Change
|
Estimated Long-term
Growth Rate
|
|
BP (NYSE: BP )
|
*****
|
$54.12
|
(1%)
|
7%
|
|
Dynamic Materials (Nasdaq: BOOM )
|
*****
|
$18.52
|
(36%)
|
15%
|
|
Olin (NYSE: OLN )
|
*****
|
$16.99
|
(27%)
|
14%
|
|
Stillwater Mining (NYSE: SWC )
|
*****
|
$7.85
|
21%
|
NA
|
|
Sutor Technology (Nasdaq: SUTR )
|
*****
|
$3.69
|
(28%)
|
10%
|
Source: Motley Fool CAPS; Yahoo! Finance.
Even though the average company in the larger group, which includes utilities, miners, and commodities, lost about 14% of its value over the past year, there were still some notable performers like Northgate Minerals (NYSE: NXG ) and Stillwater Mining, the latter which has nearly tripled in value. So let's take a closer look at why investors might think some of these companies that haven't been soaring so high won't still be jumping from the frying pan into the fire.
Some spring in its step
Not that mining, even for the precious metal palladium, will ever be seen as a "green" industry, but without palladium's contribution to changing harmful emissions into benign ones in a car's catalytic converter system, we'd end up with a lot more pollutants in our atmosphere.
It's probably why investors choked on the fumes of Stillwater Mining's failure to renegotiate a supply contract with General Motors. The miner pointed out that the automaker is receiving tax dollars while sending that money off to Russia and South Africa to purchase palladium, and not from U.S.-based Stillwater. It still has its contract with Ford (NYSE: F ) , however, and the way that car company is growing, it might be a better long term bet anyway. Besides GM left the door open to future supply agreements.
TXmaverick was prescient in his June prediction that a weakening dollar would move mining stocks higher. Following comments yesterday by Fed chairman Bernanke that the recession was likely over, most precious metals jumped higher with palladium moving north to $295 an ounce.
Taking aim at growth
After swooning along with the rest of the world during the recession, chemical manufacturers haven't yet cooked up the recipe for strong growth opportunities. Olin makes chlorine, caustic soda, bleach products, and other chemicals but the place where business is booming is in its Winchester munitions division. Revenue soared 21% in the second quarter for that division as larger volumes, better pricing, and lower costs pushed the division to its highest level of sales and profits in history.
It's an intriguing enough development that even Fool co-founder David Gardner thought enough of it to give it the thumbs up on CAPS. "Feels like one of those diversified American staples companies that has a strong competitive (and with Winchester: branded) edge in its market niches," but noted he hasn't delved very deeply into the company. "CAPS is for fun, too!" he writes.
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 with other investor analysts on whether you think these stocks are ready to bound higher.
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