3 Stocks in a Tailspin

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 InterMune fell 75% on Wednesday when the FDA declined to approve its lung drug Esbriet.

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 160,000 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.

Source: Motley Fool CAPS. Price return April 9 through May 4.

Green Mountain Coffee Roasters
Green Mountain Coffee Roasters offered up some impressive financial results in its recent quarterly report, but also gave a fiscal third-quarter outlook that fell short of Wall Street's expectations, which as is often the case weighed more heavily on the price of shares. Sales of its Keurig single-cup coffee brewing products showed strong growth in the third quarter, and it expects to continue expanding, but the stock has little support in CAPS, with several members believing shares may have gotten ahead of the fundamentals of the company. 

The company will also face more competition from Starbucks (Nasdaq: SBUX) which is making a big push into retail with its Via instant coffee and recently said it's not going to sit back and watch while Green Mountain grows. Given the headwinds the company is facing, only 67% of the 884 CAPS members rating Green Mountain Coffee Roasters expect it to beat the market average.

Buffalo Wild Wings
Restaurant-bar operator Buffalo Wild Wings had been aiming for an impressive 20% earnings growth this year, and investors have been rewarding the company with higher values for its shares until recent fears that it might not reach its earnings target came to a head. The company recently reported flat same-store sales for the first quarter, with comparables beginning to head south in April as well. 

The chain operator has seen some increasing competition in the lucrative bar business, which has some analysts questioning its earnings growth this year. The stock sits at middle-of-the-road three-star rating in CAPS, with some members still seeing long-term potential, however, as 93% of the 4,589 members who have weighed in on Buffalo Wild Wings still hold a bullish outlook on the stock. 

McMoRan Exploration
McMoRan Exploration and its partners Energy XXI (Nasdaq: EXXI) and Plains Exploration & Production (NYSE: PXP) are sitting on some big potential with the Davy Jones prospect in the Gulf of Mexico that has many investors bullish on the outlooks for all three companies. But the capital required and difficult nature of drilling at extreme depths is expected to be a challenge for even the most sophisticated drillers -- even ExxonMobil (NYSE: XOM) abandoned a deep-drill effort several years ago after spending millions in its attempt. 

McMoRan now expects a test flow in 12 to 18 months at the Davy Jones site, and its recent announcement of a wider-than-expected first-quarter loss (and disappointing results from its Blueberry Hill wells) has recently taken shares down from recent highs. Shares of Energy XXI and Plains Exploration have withered as well. But strong support has remained for the company in CAPS: 96% of the 459 members rating McMoRan Exploration expect it to outperform the broader market.

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 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.