Individual stocks can surge 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 XenoPort
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 150,000 CAPS members to make better decisions.
We'll use CAPS' handy stock screening tool to quickly zero in on companies with three factors: their prices have fallen at least 15% in the last four weeks, and they have a market cap greater than $100 million and a beta of less than 3.
Company |
CAPS Rating
|
4-Week |
---|---|---|
American Superconductor |
** |
(22.9%) |
Penn National Gaming |
** |
(15.7%) |
Energy Conversion Devices |
*** |
(16.1%) |
Source: Motley Fool CAPS. Price return Jan. 29 through Feb. 22.
American Superconductor
Energy technology firm American Superconductor's shares were flying high recently after strong sales growth in the first two quarters of its fiscal year. It followed up that strong sales growth with a 95% revenue jump in its recently announced third quarter, coupled with earnings that topped analysts' expectations, but investors were more focused on the company's outlook which implied a slowdown in fourth-quarter growth. Investors acknowledge there's plenty of opportunity for growth in its largest market of China, but concentration of its revenue in a small list of companies still makes many CAPS members wary, as only a lackluster 81% of the 628 members rating American Superconductor expect it to outperform the market.
Penn National Gaming
It's been a tough time for casino stocks lately with Penn National joining others like MGM
Energy Conversion Devices
Energy Conversion Devices was among other solar companies like Evergreen Solar
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 5,400 stocks that 150,000-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.