3 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%, and 50% -- even on the market's worst days.        

For example, shares of McAfee jumped 57% when it was announced that Intel would buy the company for $7.7 billion.

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

Company

CAPS Rating
(out of 5)

4-Week
Price Change

Akamai Technologies (Nasdaq: AKAM  )

****

23.2%

Silver Wheaton (NYSE: SLW  )

****

21%

Netflix (Nasdaq: NFLX  )

**

23%

Source: Motley Fool CAPS. Price return from July 30 through Aug. 27.

Akamai Technologies
While Akamai's competitor Level 3 Communications (Nasdaq: LVLT  ) widened its second-quarter loss and posted a dip in revenue, Akamai snapped out 20% top-line growth as it saw stronger demand in all areas of its business. A sell-off of its shares ensued since the market wasn't completely satisfied with Akamai's results, but shares have since recovered amid a swirling of takeover rumors as M&A activity has picked up in the tech sector. Akamai's lofty valuation is keeping some CAPS members cautious, but many still remain bullish on its long-term potential as 96% of the 3,045 members rating Akamai Technologies expect it to outperform the broader market. 

Silver Wheaton
Silver stream company Silver Wheaton turned in another strong quarter recently in which it generated record earnings, a record volume of silver equivalent sales, and increased its operating cash flows by more than 150%. Despite its rich valuation, many CAPS members still see potential for growth with Silver Wheaton's interests in a number of growth prospects coupled with a bullish long-term outlook for silver. Barrick Gold's Pascua-Lama project is on track to begin production in 2013, and Goldcorp's (NYSE: GG  ) Penasquito mine continues to ramp up production, which has Silver Wheaton expecting even better results for the second half of the year. In CAPS, 96% of the 1,981 members rating Silver Wheaton are bullish on its chances to beat the broader market.   

Netflix
Netflix has been pushing further into online streaming with its recent deal for premium movie content from Epix and its killer app for Apple's (Nasdaq: AAPL  ) iPhone and iPod. But the CAPS community is somewhat divided on the future direction of shares -- some investors like its foresight to strengthen its lead in streaming, but others see the specter of increasing competition as too much for the company to weather while maintaining its current growth trajectory. Coinstar's (Nasdaq: CSTR  ) Redbox is expanding its kiosk footprint and plans to unveil a digital strategy later this year, and Hulu is mulling a possible IPO to fund its growth and build up its content, which could pose big challenges to Netflix's position. Today, about 83% of the 7,980 CAPS members rating Netflix believe it will outpace the S&P.           

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.

The Motley Fool Stock Advisor service looks for companies with strong management poised to beat the market over the long haul. To see all the stocks that have helped Tom and David Gardner beat the market by 60 points on average, take a free 30-day trial.

Fool contributor Dave Mock has his own story, but there's no "happily ever after" at the end of it. He owns shares of Intel, which is an Inside Value recommendation. Akamai Technologies is a Rule Breakers selection. Apple and Netflix are Stock Advisor recommendations. The Fool's disclosure policy has the momentum of a freight train, but can stop on a dime.


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