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 of Perot Systems -- founded by former U.S. presidential candidate Ross Perot -- jumped 65% when it was announced that Dell would take a big plunge into services and buy the company for $30 a share.
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 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 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 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
|
|
American Capital (Nasdaq: ACAS)
|
****
|
29.3%
|
|
Huron Consulting Group (Nasdaq: HURN)
|
***
|
26.8%
|
|
CEL-SCI (AMEX: CVM)
|
**
|
129.6%
|
|
Microvision (Nasdaq: MVIS)
|
**
|
50.4%
|
|
Advanced Micro Devices
|
**
|
30.4%
|
Source: Motley Fool CAPS. Price return from Aug. 28 through Sept. 25.
American Capital
Business development companies American Capital and Allied Capital (NYSE: ALD) have struggled through the recession, trying to limit their losses and working to manage their debt payments. American Capital, which is in default of debt covenants, has had to work with its lenders by entering into forbearance agreements, and has suffered ratings downgrades on its debt.
But the company recently got relief with a $400 million sale of its stake in life sciences equipment maker Axygen BioScience to Corning (NYSE: GLW), and investors brought the stock back from the brink earlier this month. The company realized a gain of $35 million and received $182 million in proceeds from the sale. It is the most recent of multiple sales of assets and exits from positions in companies that have brought in gains that will help boost its liquidity.
Despite the going-concern risk of the company, some CAPS members like the dividends that it has managed to pay and think it has a good chance of surviving the debt issues. More than 94% of the 2,007 CAPS members rating American Capital expect it to outperform the market.
Huron Consulting
Shares of Huron have been trying to claw their way back after an accounting scandal sent the stock into a steep dive in Mahindra Satyam-like (NYSE: SAY) fashion. The company completed the restatement of several past fiscal years of financial results and then went on to report rising earnings and revenue in its recent quarter. It also replaced its management team and hasn't yet lost any major clients, with the new management team stating that the recent issues have had minimal effect on business.
But some investors are still wary, as there are plenty of uncertainties with the company. Huron will have to deal with the aftermath by cooperating with an SEC probe and responding to class action lawsuits, and it's faced with the tough task of repairing its damaged reputation, which is a key part of its business.
But while some investors remain cold on Huron, many others are warming up to it, as 90% of the 286 CAPS members rating Huron Consulting 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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