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 the scarcely followed Web.com jumped 36.5% last Wednesday after its second-quarter earnings release, in which it said the closing of its Register.com acquisition is expected to be immediately accretive to earnings.
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 165,000 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.
|
Company |
CAPS Rating
|
4-Week |
|---|---|---|
|
NorthStar Realty Finance |
**** |
30.1% |
|
Fuel Systems Solutions |
*** |
34.6% |
|
Affymax |
** |
39.1% |
Source: Motley Fool CAPS. Price return from July 9 through Aug. 6.
NorthStar Realty Finance
Shares of real estate investment trust NorthStar Realty Finance have bounced back from a recent nosedive that followed its disappointing first-quarter earnings report. Yet despite the ongoing troubles in the commercial real estate market, it reported positive second-quarter net income and a big jump in adjusted funds from operations. The company is taking advantage of the distressed commercial real estate market by picking up a $1.1 billion collateralized debt obligation from commercial lender CapitalSource
Many CAPS members see the recent events as positive signs and give NorthStar a four-star rating, with 95% of the 679 members rating NorthStar Realty Finance expecting it to outperform the broader market.
Fuel Systems Solutions
Natural-gas vehicle stocks have been gaining some momentum lately, and Fuel Systems Solutions has been one of the beneficiaries. The supplier of alternative-fuel components saw a double-digit percentage increase in its share price following its second-quarter earnings release, and peer Westport Innovations
More than a few CAPS members think Fuel Systems Solutions is well-positioned as alternative-fuel vehicles gain more traction, with 87% of the 524 members rating the company voting bullishly.
Affymax
After being absolutely crushed when late-stage clinical trial data raised safety concerns about its anemia drug, shares of Affymax jumped recently when the company announced plans to continue the registration process with the Food and Drug Administration next year with partner Takeda Pharmaceutical. The company still has its sights set on eventually grabbing market share from Amgen's
But CAPS members put the company at only a two-star rating, with just three-quarters of the 124 members rating Affymax believing it is 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 165,000-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.
