3 Stocks in a Tailspin

Individual stocks can rise 10%, 25%, or even higher in a short time. And they can fall just as far, just as quickly. For example, shares of Telestone Technologies fell 24% last Friday, a day after the company reported a drop in second-quarter earnings despite a 37% jump in revenue.

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 165,000 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 20% in the past four weeks, and they have a market cap greater than $100 million and a beta of less than 3.


CAPS Rating
(out of 5)

Price Change (Nasdaq: OSTK  )



Corinthian Colleges (Nasdaq: COCO  )



SandRidge Energy (NYSE: SD  )



Source: Motley Fool CAPS. Price return July 23 through Aug. 17.
Similar to's (Nasdaq: AMZN  ) increase in second-quarter revenue on the back of strong online sales, posted a 32% jump in quarterly revenue, with growth across all major categories of its business. But the sales numbers still weren't enough to meet Wall Street's expectations. Thanks to higher expenses, the company ended up with a surprise loss. Most CAPS members are holding strong on their bearish opinion of the stock, keeping it at the lowest one-star rating for several years. A meager 31% of the 1,095 CAPS members rating expect it to outperform the broader market.

Corinthian Colleges
For-profit education companies have received more scrutiny lately, after the Government Accountability Office made more allegations regarding questionable business practices of several schools. Government data showed that Corinthian Colleges ranked among schools such as ITT Educational Services (NYSE: ESI  ) with student loan repayment rates of less than 35%. Thus, the government is considering new regulations, putting the schools at risk of losing federal financial aid funds. While some investors are circling the for-profit education sector in search of some bargains, many CAPS members remain cautious on Corinthian, rating it two stars, with 79% of the 298 members rating it expecting it to beat the market averages.

SandRidge Energy
SandRidge Energy hasn't been sitting still as its shares steadily declined over the past year: It made some significant moves to gain more oil exposure amid weaker natural gas prices, among them its purchase of Arena Resources. While peers Brigham Exploration (Nasdaq: BEXP  ) and Apache (NYSE: APA  ) recently beat analysts' quarterly expectations with strong results, SandRidge's shares were slammed after the company missed analysts' revenue expectations and cut its full-year production guidance. This is despite 36% top-line growth and a quarterly profit, compared with a loss a year ago. SandRidge's balance sheet is weighed down by a lot of debt, but some CAPS members are betting on a turnaround. They've rated the company five stars -- the top rating -- despite some eyebrow-raising metrics. In CAPS, 97% of the 1,010 members rating SandRidge Energy are bullish.                        

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 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.

The Motley Fool Rule Breakers service has selected dozens of world-changing stocks poised to beat the market over the long haul. To see all the stocks David Gardner and the analyst team have recommended, take a free 30-day trial today.

Fool contributor Dave Mock habitually looks for silver linings in even the darkest of clouds. He doesn't own shares of companies mentioned here. is a Stock Advisor selection. The Fool's disclosure policy is made of sugar and spice and everything nice.

Read/Post Comments (0) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1275262, ~/Articles/ArticleHandler.aspx, 10/23/2016 12:15:19 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
AMZN $818.99 Up +8.67 +1.07% CAPS Rating: ****
APA $62.19 Down -1.29 -2.03%
Apache CAPS Rating: ***
BEXP.DL $0.00 Down +0.00 +0.00%
Brigham Exploratio… CAPS Rating: ***
COCOQ.DL $0.00 Down +0.00 +0.00%
Corinthian College… CAPS Rating: *
ESINQ $0.02 Down +0.00 +0.00%
ITT Educational Se… CAPS Rating: **
OSTK $14.45 Down -0.35 -2.36% CAPS Rating: *
SD.DL $0.00 Down +0.00 +0.00%
SandRidge Energy CAPS Rating: ***