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

For example, shares of Cogent jumped 24% a few weeks ago after 3M offered to buy the fingerprint biometrics company for $10.50 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 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

Blue Coat Systems (Nasdaq: BCSI  )

****

37.9%

A123 Systems (Nasdaq: AONE  )

***

31.2%

Atmel (Nasdaq: ATML  )

***

24.1%

Source: Motley Fool CAPS. Price return from Aug. 20 through Sept. 17.

Blue Coat Systems
Similar to rival McAfee's (NYSE: MFE  ) second-quarter results, which beat analysts' earnings expectations, Blue Coat Systems topped bottom-line estimates in its most recent quarter. But investors weren't pleased with its forward sales guidance. To help energize its growth plans, the company brought in a new CEO with a strong sales background in hopes of improving sales execution, and the market has welcomed the news by boosting its share price. With growth potential in the WAN optimization market, CAPS members have also recently become more bullish on Blue Coat Systems as 93% of the 471 CAPS members rating Blue Coat Systems today believe it will outperform the broader market.

A123 Systems
While Berkshire Hathaway (NYSE: BRK-B  ) backed Chinese battery and auto maker BYD recently gained investors' attention abroad by making a move to secure raw materials for the long term, A123 Systems has been in the limelight here in the U.S. with the opening of its new plant near Detroit. A123 and peer Johnson Controls have benefited from federal grants as the government has pumped stimulus money into the industry, which A123's CEO calls instrumental to growing domestic manufacturing. With the increasing attention and capacity on the rise, CAPS members have notched up their bullish sentiment for A123 Systems, and now 88% of the 372 CAPS members rating the company see it as a market-beating investment.                    

Atmel
Atmel is coming off a strong second quarter, which saw a 38% jump in revenue and its highest gross margin since 2000. Like peer Cypress Semiconductor (Nasdaq: CY  ) , the company has been successful in booking design wins for touchscreen and touchpad chips in attempts to take share of a big market from Synaptics (Nasdaq: SYNA  ) . Some investors think more opportunities are out there for Atmel as it continues to ride the wave of demand for mobile devices of all types. The company's designs are already in a number of smartphones, and Atmel looks to gain from the up-and-coming tablet market, with its chips used in the iPad, the Dell Streak, and Samsung Galaxy Tab. In CAPS, 88% of the 262 members rating Atmel believe it will outperform the market averages.      

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 69 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 3M. Berkshire Hathaway and 3M are Inside Value recommendations. Cypress Semiconductor is a Rule Breakers pick. Berkshire Hathaway is a Stock Advisor selection. The Fool owns shares of Berkshire Hathaway.

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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