5 Stocks Bucking the Downtrend

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 Burlington Northern Santa Fe (NYSE:BNI) shot up 27% when it was announced that Warren Buffet's Berkshire Hathaway (NYSE:BRK-B) would bag this elephant and buy the rest of the railroad's shares that it doesn't already own.                     

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 20% 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.

Source: Motley Fool CAPS. Price return from Oct. 9 through Nov. 5.

Domo Arigato, Mr. iRobot
In addition to its Roomba robot vacuum cleaners, robot maker iRobot makes various military-grade robots for more dangerous applications and has strategic alliances with companies such as Boeing and Taser (NASDAQ:TASR). Its stock has been somewhat volatile in the past few months, but it sprang to life recently after it beat Wall Street's third-quarter expectations, despite lower year-over-year earnings and revenue.

Its domestic home robot sales saw weakness in the quarter, but international sales shot up 55%. Its government and industrial robots division received a strong amount of orders from the U.S. government, and many CAPS members like the potential for its unmanned PackBot robots, which are used to investigate suspicious objects and identify roadside bombs. In CAPS, 88% of the 1,098 members rating iRobot expect it to outperform the market.

Movie madness
DVD rental company Netflix has so far been able to quell the doubters and generate impressive gains for its shareholders in recent years. The company has continued to perform well, reporting strong third-quarter results that beat expectations, with a 28% rise in subscribers over last year that helped the company bring in 24% more revenue. It's looking for its good fortune to continue, as it also raised its guidance.

Some investors see a big future ahead for the streaming of online movies as new competitors like Best Buy (NYSE:BBY) try to get a piece of the market. Netflix hopes to counter the competition by expanding the ways its streaming movies reach its subscribers -- in addition to Microsoft's Xbox 360 and certain Blu-Ray players, Netflix is bringing streaming movies to Sony's (NYSE:SNE) PlayStation 3. Some CAPS members are concerned that the recent run-up has brought shares into overvalued territory at the same time the company has taken on debt to buy back shares that it believes are undervalued. But there's a large following of believers who hold that the future growth potential will outweigh the near-term valuation concerns. At this point, 83% of the 7,117 CAPS members rating Netflix expect it to beat the broader market.

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.