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 Advanced Micro Devices (NYSE: AMD ) jumped 22% after the company smoked the peace pipe with Intel, which agreed to pay $1.25 billion to its processing rival.
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 do the picks of their poorer-performing peers. Let's use the collective wisdom of more than 145,000 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.
|
Company
|
CAPS Rating
(out of 5)
|
4-Week
Price Change
|
|
Diana Shipping (NYSE: DSX )
|
*****
|
20%
|
|
InterDigital (Nasdaq: IDCC )
|
****
|
23.2%
|
|
Solarfun Power
|
***
|
26.5%
|
|
KMG Chemicals (Nasdaq: KMGB )
|
**
|
24.5%
|
|
Nanometrics
|
*
|
47.9%
|
Source: Motley Fool CAPS. Price return from Oct. 23 through Nov. 20.
Looking shipshape
Diana Shipping's third-quarter net income was chopped in half, reflecting the pressures in the dry bulk shipping industry felt by others like Navios Maritime Holdings and Genco Shipping & Trading (NYSE: GNK ) . But higher-than-expected dayrates led to results still beating expectations. The company's management says it thinks that delayed deliveries of ships could be boosting the Baltic Dry Index and wants to see how things pan out before making further moves to expand. CAPS members like that the Greek shipper is in a good position to benefit from a recovery: With the flexibility of a solid balance sheet, the company can expand over the next 24 to 30 months and wait patiently for good opportunities that may come from the sector turmoil. In CAPS, 97% of the 2,316 members rating Diana Shipping expect it to outperform the market.
InterDigital
InterDigital's shares went into a tailspin several months ago after a U.S. International Trade Commission judge ruled that Nokia (NYSE: NOK ) didn't infringe on InterDigital's patents. But the stock has popped back recently after the company blew past third-quarter expectations. It landed new patent licensing agreements that helped push revenue up 37% while operating expenses dropped 31%, resulting in a big jump in net income. Licensing revenue accounts for the vast majority of InterDigital's revenue; the company holds a long list of patents. It has also made some stellar deals, licensing its technology to some of the top smartphone makers, like Apple, Research In Motion (Nasdaq: RIMM ) , and Samsung.
While InterDigital is experiencing some weakness in the mature Japanese handset market, it expects its exposure to this market to decrease over time and predicts that an increasing number of 3G handsets will penetrate global markets, filling the gap. CAPS members also like the potential the company has to expand beyond today's licenses -- it looks to diversify by licensing its patents to other handset makers and licensing its technology for other products like laptops, netbooks, and machine-to-machine modules. At this point, 95% of the 1,084 CAPS members rating InterDigital are betting it will beat the S&P 500.
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 145,000-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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