5 Stocks Bouncing Back

However hard the market slams a stock, there's always the chance it'll come bouncing right back. We'll consult our Motley Fool CAPS community to find shares on the rebound.

We've unearthed more than a few companies springing back with five-star ratings. Those accolades mean that our 160,000 CAPS members are confident that these stocks will beat the market in the months ahead. Let's see what members are saying about the five below:

Company

CAPS Rating Today

Recent Price

52-Wk Price Change

Est. LT Growth Rate

Berkshire Hathaway (NYSE: BRK-A  )

*****

$123,250.00

48%

5%

CapitalSource

*****

$5.99

340%

11%

China Gerui Advanced Materials Group (Nasdaq: CHOP  )

*****

$7.78

42%

18%

China MediaExpress Holdings (AMEX: CCME  )

*****

$11.57

52%

NA

NYSE Euronext

*****

$28.39

60%

12%

Source: Motley Fool CAPS; Yahoo! Finance.

The broader market averages staged a pretty bold recovery until recently, but conglomerates have done even better. The average financial company rose 57% in value from the year-ago period. But that figure includes investment banker Rodman & Renshaw (Nasdaq: RODM  ) , which saw its stock soar 1,900%, and insurer Conseco (Nasdaq: CNO  ) , which has risen from deathwatch a year ago to achieve a measure of greatness. Conseco's stock is up almost 1,600% in the past year.

Let's see which of the companies in the table above might be poised for a similarly spectacular revival.

Some spring in its step
Despite his seemingly open, folksy ways, Warren Buffett is always an interesting enigma to decipher. While it makes sense for Berkshire Hathaway to eliminate its holdings of Norfolk Southern and Union Pacific in light of Buffett's purchase of Burlington Northern, there's a bit of a conundrum evolving in his simultaneous sales of oil companies ConocoPhillips (NYSE: COP  ) and ExxonMobil.

The Burlington purchase was all-in bet on a rebounding U.S. economy. CAPS All-Star member Jeffreyw think it represents Buffett doing what he does best: "[Berkshire] will continue to benefit from what Warren Buffett has always done... find undervalued companies at bargain prices and buy them. Being added to the S&P500 will require some institutional purchasing for their index funds as well."

Read all about it
China MediaExpress Holdings operates China's largest television ad network on intercity buses. Now it's planning big moves following a $30 million private placement in January. While M&A activity is now clearly on the drawing board, the company might not face smooth sailing. A number of Chinese mergers had to be called off last year, including a planned union of media giants Sina and Focus Media (Nasdaq: FMCN  ) , after government opposition created a hostile climate.

CAPS member kevquinn isn't concerned, expressing extreme bullishness about China MediaExpress's future: "[China MediaExpress Holdings] had more than enough money to finance expansion but they've opted to seek financing for an even greater expansion. They are full-on bulls!"

High-strength steel
Niche steel processor China Gerui Advanced Materials Group is also on the move. The steel sector has benefitted from that country's stimulus spending. However, the government sees the potential for a bubble forming, and it's putting the brakes on various initiatives.

Despite a possible government-enforced cool-off, CAPS member rknapton says the actions the company is taking certainly make China Gerui look like it has no plans to hunker down:

It looks like growth has slowed a bit... but they address that in their investor presentation, and say that isn't due to a lack of demand, but that their production lines are near capacity... so they are making a new production facility that will be able to double their production capacity by 2011. If they can have near the same margins on this... that would make the stock real real cheap.... but like I said, I don't know anything about how prices for cold-rolled steel fluctuate.

The ball's in your court
Many factors go into whether a stock is a buy or sell, so it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page. Head over to CAPS today and share your thoughts with other investor-analysts on whether you think these stocks are ready to bound higher.

NYSE Euronext is a Motley Fool Rule Breakers recommendation. Sina is a Motley Fool Stock Advisor selection. The Fool owns shares of CapitalSource. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.


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