3 Stocks in a Tailspin

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Individual stocks can rise 10%, 25%, or even higher in a short period of time. And they can fall just as far, just as quickly. For example, shares of storage products maker STEC tumbled nearly 39% Wednesday after the company warned that key customer EMC (NYSE: EMC) would carry over inventory into next year, potentially affecting first-quarter sales and earnings.

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 140,000 CAPS members to make better decisions.

We'll use CAPS' handy stock screening tool to quickly zero in on companies whose share prices have fallen at least 20% in the past four weeks and that have a market cap 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 the results will update with the market.

Company	CAPS Rating (out of 5)	4-Week Price Change
Boyd Gaming (NYSE: BYD)	**	(30%)
Alcatel-Lucent (NYSE: ALU)	**	(21.5%)
Advanced Micro Devices (NYSE: AMD)	**	(21.1%)

Source: Motley Fool CAPS. Price return Oct. 9 through Nov. 3.

Boyd Gaming
It was a rough third quarter for casino operators like Boyd Gaming, Wynn Resorts (Nasdaq: WYNN), and Las Vegas Sands (NYSE: LVS) because gamblers aren't spending. While Las Vegas Sands and Wynn got some help from their Macau operations in China, Boyd owns casinos in six states across the U.S., and its Las Vegas properties attract mostly locals, which has been a tough market. And its unfinished $4.8 billion Echelon resort project in Las Vegas will sit empty for another three to five years, because the weak economy is forcing the company to hold off on restarting construction. More than a few CAPS members are boycotting a roll of the dice on casinos, with only 85% of the 374 members rating Boyd Gaming expecting it to outperform the market.

Alcatel-Lucent
Alcatel-Lucent broke from its recent cash-burning habit and pulled in positive free cash flow for the third quarter. However, it once again posted a loss, because many of its customers have cut spending on capital investments. Alcatel-Lucent and other European equipment makers like L.M. Ericsson and Nokia Siemens Networks have faced pricing competition from Chinese companies like Huawei Technologies, and the company is experiencing large declines in demand for older technologies. Aside from the second quarter of 2009, profits have been hard to come by since Alcatel merged with Lucent Technologies in 2006. Third-quarter revenue came in 9% lower, as its loss widened compared with last year, and the company's chief financial officer expects this weak telecom equipment market to continue. Today, only 72% of the 531 CAPS members rating Alcatel-Lucent expect it to beat the S&P 500.

AMD
Advanced Micro Devices' shares have been in a funk since the company posted another loss and reported a 22% drop in revenue for the third quarter compared with last year. The company gave a weaker revenue outlook for the fourth quarter, facing increased competition from archrival Intel (Nasdaq: INTC). Even though there was some benefit from increasing demand for computer microprocessors, with revenue increasing from the second quarter, some CAPS members remain concerned about the company's balance sheet. Only 81% of the 3,412 members rating AMD are bullish today.

Ultimately, whether or not you believe a fall in any stock is warranted, your own research is more important than collective opinions. CAPS can help you quickly focus your due diligence, and even point out potential pitfalls you may not have seen.

Add your take on these or any of the 5,300 stocks that 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.