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, examining one specific sector of the economy in search of companies with rising CAPS ratings.         

Among the 468 stocks listed under "health care" in the CAPS' screener, we've unearthed more than a few with five-star ratings. Those accolades mean our 160,000 CAPS members are confident that these stocks will beat the market in the months ahead, but let's see what members are saying about the five below:

Company

CAPS Rating Today

Recent Price

52-Week Price Change

Est. Long-Term Growth Rate

Covidien

*****

$50.85

59%

12%

Electro-Optical Sciences (Nasdaq: MELA  )

*****

$9.29

131%

40%

Hologic (Nasdaq: HOLX  )

*****

$19.56

64%

12%

Novo Nordisk

*****

$77.43

71%

19%

Varian Medical Systems

*****

$53.80

87%

15%

Sources: Motley Fool CAPS; Yahoo! Finance.

As the broader market averages have staged a pretty bold recovery until recently, health-care stocks have done even better. The average health-care company has more than doubled in value from the year-ago period, despite the fears of some that Obamacare will become a reality. However, that also includes some incredible returns from the likes of Human Genome Sciences (Nasdaq: HGSI  ) , which rose more than 3,900%, and Keryx Pharmaceuticals (Nasdaq: KERX  ) which soared almost 2,100%. Nice work if you can get it.

So let's take a closer look at why investors think that some of these other companies won't be jumping from the frying pan into the fire.

Some spring in its step
With melanomas accounting for 75% of all deaths associated with skin cancer, the rate of cases getting diagnosed grows every year; some 120,000 new cases were diagnosed last year. It's easy to understand why Electro-Optical Sciences -- soon to be known as MELA Sciences -- is an investor favorite. Its handheld device for discovering melanomas could dramatically change the way these cancerous growths are found.

There's a big opportunity to steal share from General Electric (NYSE: GE  ) and Siemens (NYSE: SI  ) , both of which manufacture PET/CT scanners to help in the early detection of melanomas. But without any adverse side effects reported from Electro-Optical's MelaFind, this could be a huge chance to get in.

With 95% of the CAPS members rating the medical device maker to outperform the market, alblocker says the sky's the limit:

Melonoma's are something a vast number of people face with poor detection. With the device that Mela will bring to the market once it is approved, the sky is the limit. A large co like Pfizer would pay big bucks to acquire such a money cow.

Read all about it
Rumor had it that Hologic might be the "money cow" Philips Electronics was looking for, as rumors of a possible buyout pushed the stock higher last week. With a patent infringement lawsuit settled with Johnson & Johnson (NYSE: JNJ  ) , the women's health device maker would make a nice addition to someone's portfolio. It said demand for its mammogram scanners was bigger than it expected, and it raised its profit forecasts for the year as a result.

Although he's still bullish on Hologic, CAPS member MichaelKnows felt more confident when the old management team was leading the company forward:

Hologic, the leader in womens health care in over nine sectors.. John Cumming was possibly the greatest CEO in womens health care and maybe the most successful as well.. Future acquisitions, global expansion, and Tomo approval will help company grow.. I don't see the company continuing like this forever. Rob C. the new CEO doesn't have the same vision.

The ball's in your court
There are many factors that 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.

Novo Nordisk is a former Motley Fool Global Gains selection. Johnson & Johnson is a Motley Fool Income Investor pick. The Fool has bought calls on Electro-Optical Sciences. Motley Fool Options has recommended a buy calls position on Johnson & Johnson. Try any of our Foolish newsletter services today, 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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