5 Stocks Breaking Out

Volatile markets seem to be the norm these days, as stocks gyrate through ups and downs on a daily basis. But sometimes buyout news and other short-term forces can send individual stocks soaring by 10%, 25%, even 50% -- even on the market's worst days.        

For example, shares of Facet Biotech soared 67% one day recently when it was announced that Abbott Labs (NYSE: ABT) would buy the company for $27 per share.   

But beyond less-predictable events like that one are stocks with fundamentally compelling reasons behind a big move. 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. Here's an example of how we can use the collective wisdom of more than 160,000 CAPS members to filter out the noise and find companies with strong potential.

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. Then we can use the insight of the CAPS investment community to add some context to these market movers.

Source: Motley Fool CAPS.
^ Feb. 19 through March 19.

Akamai
Many already regard Akamai as the top dog in online content delivery, holding a strong lead against others like LimeLight Networks and Level 3 Communications (Nasdaq: LVLT). Lately, more and more CAPS members have been talking about building momentum that they expect will continue to distance it from the competition, including landing a killer deal to be the primary content delivery network for Netflix.

In addition to a sound bullish sentiment in CAPS, favorable outlooks from several industry and Wall Street analysts have also been flowing Akamai's way. The company's size and position allow it to remain cost-competitive and keep competitors at bay, and investors see plenty of opportunity as demand for online content grows.

Little surprise then that 96% of the 2,900 CAPS members rating Akamai expect it to beat the broader market.

Jamba
The recession has been rough on consumer companies like Jamba and Starbucks (Nasdaq: SBUX), as customers adjust their spending habits, leading to double-digit declines in revenue and same-store sales for Jamba last year. But some CAPS members see the company -- which owns and franchises the fruit juice and smoothie Jamba Juice stores -- as a turnaround story with good growth potential.

The company has been making moves to cut costs and strengthen its balance sheet and is aiming for more improvement in 2010. This year it expects to return to positive comps, expand the number of franchise stores, and build an international presence. And it recently added new menu items, like hot beverages, as it looks to attract more customers in a variety of seasons.

If the company's initiatives can take hold, it could even improve its prospects as a buyout candidate. In CAPS, 93% of the 663 members rating Jamba expect it to be a market-beating investment.

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 5,400 stocks that our 160,000-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.