Why Did My Stock Just Die?

Your stock just took a nosedive -- but don't panic. First, let's see whether it had good reason to fall. Sometimes, panic-fueled drops can make excellent buying opportunities. Here's the latest crop of cratered stocks that could provide a possibility for profit:

Stock	CAPS Rating (out of 5)	Monday's Change
Rite-Aid (NYSE: RAD  )	**	(13.6%)
Copart (Nasdaq: CPRT  )	****	(10.7%)
UQM Technologies (NYSE: UQM  )	**	(8.2%)

The devil's in the details
Declines that exceeded the typical 1-2% gyrations are big deals, yet often times there isn't even solid news that makes a stock run one way or the other.

UQM Technologies, a maker of electric vehicle propulsion systems with collaborative marketing agreements for electric powertrain products with Borg Warner, is an example. Warren Buffett might be traveling to China to jump-start his flagging electric car boondoggle BYD, but the industry itself seems to have plenty of promise with Tesla (Nasdaq: TSLA  ) catching the public's imagination and opening a showroom in Paris even.

You can drive home your views of this electric vehicle components on the UQM Technologies CAPS page.

The sky's not the limit
Speaking of driving, salvaged and used auto auctioneer Copart was going nowhere fast as well, hitting a wall with sales rising only 3% and profits up 5%, but both measures falling well short of analyst expectations. It was hurt by inventory jumping in the quarter as cars that usually sell in the third and fourth quarter are being pushed out to 2011 and also by rising expenses. NASCAR sponsorships, new compensation packages for its chairman and CEO, and currency exchange fluctuations all took a toll. On the other hand, used car chain CarMax (NYSE: KMX  ) was able to keep its costs in line and subsequently beat expectations.

Copart has been investing in its business for longer term growth, but initiatives like its U.K. expansion are more capital intensive because they're required to hold the inventory themselves until the vehicles are sold instead of just acting like a broker. It may take a little longer to get the kinks out than previously thought, but still appears worthy of its four-star CAPS rating.

Over 97% of the nearly 1,500 members rating the auctioneer have indicated they believe it will still turn in market-beating performances. Keep an eye on all the Foolish news and analysis by adding Copart to your My Watchlist page.

Don't bring me down
The nation's third-largest drugstore chain behind Walgreen (NYSE: WAG  ) and CVS Caremark (NYSE: CVS  ) , Rite-Aid also disappointed investors with an earnings report that showed declining sales forcing it to cut full year revenue estimates by $200 million.

That shouldn't have come as much of a surprise, at least not to whack its shares as much as it did. All three convenience stores have been reporting weak sales as the recession caused consumers to cut back on discretionary spending. It was enough for CVS to lower its outlook for same store sales last month to just 2% to 3.5% growth, but that's better than Rite-Aid which now believes comps will be flat to down 1.5% for the year.

Highly rated CAPS All-Star member cecamado7 believes the competitive pressures will eventually undo Rite-Aid, an assessment with which WPThatcher would seemingly agree: "Bad company that can't out-execute CVS or Walgreen's. Too much long-term debt. Negative book value/share."

The drugstore chain has been working to reduce that debt load, and refinancing charges added $0.05 per share to the losses it posted, but it still would have been worse than the numbers Wall Street was looking for. Let us know in the comments section below or on the Rite-Aid CAPS page if investors will need a prescription of Prozac to stay with this company.

Ready for a resurrection
Just because your stock has taken a beating doesn't mean it's going to roll over and die. Markets are known for overreacting. A closer look at what's happened to your stock can give you an edge over other investors who just react to the market's lead.

That's why it pays to start your own research on these stocks on Motley Fool CAPS where you can read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from the stock's CAPS page. Then you can decide for yourself whether it's ready to come back from the dead.