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 up by 10%, 25%, even 50% -- even on the market's worst days.
For example, shares of Palm (Nasdaq: PALM ) jumped 20% one day last week on rumors that the struggling company might be a buyout candidate. The stock has risen another 17% today as rumors continue to swirl.
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 price increase of at least 30% 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 community to add some context to these market movers.
|
Company
|
CAPS Rating
(out of 5)
|
4-Week
Price Change
|
|
Callon Petroleum
|
****
|
92.1%
|
|
MF Global Holdings
|
****
|
34.1%
|
|
Boyd Gaming (NYSE: BYD )
|
***
|
41.4%
|
|
Popular Inc. (Nasdaq: BPOP )
|
***
|
32.8%
|
|
MBIA
|
*
|
35.1%
|
Source: Motley Fool CAPS. Price return from March 12 through April 9.
Boyd Gaming
Despite Boyd Gaming's posting falling fourth-quarter revenue in a still-gloomy environment for casino operators, its shares have been on the rise for the past several weeks because of some signs of improvement. Management expects these stabilizing trends will continue, and the Nevada Gaming Control Board recently reported increasing gambling revenue on the Las Vegas Strip for February.
Downtown Las Vegas, where several of Boyd Gaming's casinos are, had falling revenue even though the recent numbers are compared with weak numbers from last year. But that didn't stop shares of Boyd Gaming and other casino operators like MGM Mirage (NYSE: MGM ) and Las Vegas Sands (NYSE: LVS ) from moving up after the news. And as rival Station Casinos works its way through bankruptcy court, Boyd Gaming sees a possible growth opportunity and continues to express keen interest in buying Station Casinos' assets.
In CAPS, 86% of the 388 members rating Boyd Gaming expect it to beat the broader market.
Popular
There's still a bleak outlook for Popular and many other banks as troubled mortgages and commercial loans continue to weigh on the companies' books. In Popular's case, the company posted a fourth-quarter loss and continued to set aside money for loan losses to deal with more fallout from bad debt. Yet while banks still pose a lot of risk and some investors avoid them like the plague, more hedge funds have taken a liking to banks. Lately, more of those funds have purchased shares of banks like Popular, SunTrust (NYSE: STI ) , and Zions (Nasdaq: ZION ) .
Despite the challenges, some investors think Popular may be in a position to pick up discounted assets of other failed banks, which could add to its capital and earnings. The number of failed banks continues to rise across the U.S. In Puerto Rico, Popular could be a top candidate to buy assets from the Federal Deposit Insurance Corp. if several island banks go under, and if it does it would add to its market share there.
About 88% of the 455 CAPS members rating Popular believe it will beat the market.
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 other 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.
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