3 Stocks Breaking Out

Volatile markets seem to be the norm these days, as stocks gyrate through ups and downs on a daily basis. 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 ZymoGenetics jumped 84% last Wednesday after it was announced that Bristol-Myers Squibb would buy the company at a handsome premium of $9.75 per share.

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 170,000 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 context to these market movers.

Company

CAPS Rating
(out of 5)

4-Week
Price Change^

Ceragon Networks (Nasdaq: CRNT  )

*****

28.5%

China Digital TV (NYSE: STV  )

*****

21.3%

Coeur d`Alene Mines (NYSE: CDE  )

****

22.6%

Source: Motley Fool CAPS.^From Aug. 13 through Sept. 10.

Ceragon Networks
The market wasn't all that impressed with the second-quarter results backhaul equipment provider Ceragon reported in July, despite the record quarterly revenues. But investors quickly bid up shares recently when the company said it won new orders from a leading operator in India. The country is the world's fastest-growing wireless market, attracting just about every player in the space. Qualcomm (Nasdaq: QCOM  ) jumped into the fray with a $1 billion bid in a broadband spectrum auction this year and WiMAX purveyor Alvarion (Nasdaq: ALVR  ) has been aiming to build its presence there, too.

CAPS members -- and now some Wall Street analysts -- are highly bullish on the growth potential for Cergaon in India as well as other parts of the world. In CAPS, about 98% of the 1,566 members rating Ceragon Networks expect it to outperform the broader market.

China Digital TV
Many CAPS members are bullish on China Digital TV's growing market share in China, and with China set to go all digital by 2015, investors expect demand for its digital television products to continue to rise. The company shipped a record number of its smartcards that control broadcast access in the second quarter and looks for a strong second half, as well. It's also looking to capitalize on emerging trends by investing in development of technologies like IPTV, video-on-demand and TV gaming.

Though it may not be all that sexy, 96% of the 806 CAPS members rating China Digital TV believe it will beat the market averages.  

Coeur d`Alene Mines
Breaking records has been a popular trend these days among silver miners. Both Silvercorp Metals (NYSE: SVM  ) and Pan American Silver (Nasdaq: PAAS  ) recently reported record quarterly silver production, while Coeur d'Alene Mines generated record metals sales in the second quarter, too. It's going to be adding more gold to the mix as its new Kensington gold mine is in production and beginning to fulfill a first-of-its-kind long-term supply contract with China National Gold Corp. On a macro level, many CAPS members remain bullish on precious-metals prices as governments around the world continue their robust spending.

Overall, 94% of the 1,358 CAPS members rating Coeur d`Alene Mines think it will outpace the broader 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 5,400 stocks that our 170,000-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 66 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 Quacomm and is the author of The QUALCOMM Equation. China Digital TV is a Rule Breakers pick. Ceragon Networks is a Motley Fool Hidden Gems recommendation. The Fool owns shares of Qualcomm.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool's disclosure policy has the momentum of a freight train, but can stop on a dime.


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  • Report this Comment On October 30, 2010, at 8:03 AM, hueminh2006 wrote:

    I subsribe three Motley Fool articles, 1) Hidden Gem, 2) SA, and 3) Rule Breaker. If I just follow the Rule Breaker just keep my 700 shares BIDU before split that I bought at the price $145/share. I would profit at least 650K. I just received the November Rule Breaker issue and bought 30k shares STV and hope it will grow like BIDU. Please tell me of you thought. Thanks.

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