3 Stocks in a Tailspin

Individual stocks can surge 10%, 25%, or even higher in a short period of time. And they can fall just as far, just as quickly. For example, shares of Satyam Computer Services plummeted 24% last Friday, after the company said it would delist from the New York Stock Exchange.

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 170,000 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 15% in the last four weeks, and they have a market cap greater than $100 million and a beta of less than 3.

Company

CAPS Rating
(out of 5)

4-Week
Price Change

AMAG Pharmaceuticals (Nasdaq: AMAG  )

**

(26.5%)

Power-One (Nasdaq: PWER  )

***

(22.1%)

National Bank of Greece (NYSE: NBG  )

****

(17.6%)

Source: Motley Fool CAPS. Price return Sept. 3 through Sept. 28.

AMAG Pharmaceuticals
AMAG Pharmaceuticals has big plans for its key revenue driver Feraheme, which received FDA approval last year. The company is aiming to expand its use in the U.S., and it's seeking approval in Canada and Europe. But shares are a long way from where they were when Feraheme was approved. The stock took a hit when the company recently canceled an investor conference because of a meeting with the FDA over safety issues. With a high percentage of shares being sold short, and competition from established drugs like sanofi-aventis' (NYSE: SNY  ) Ferrlecit, some CAPS members are a little unsettled with AMAG's recent events. At this point, 84% of the 229 CAPS members rating AMAG Pharmaceuticals see it beating the broader market.

Power-One
While fellow power inverter maker Satcon Technology's (Nasdaq: SATC  ) shares have nearly doubled in the past year, Power-One has seen its shares grow roughly 400% in the same time. But the last few months has been more of a downward path, as shares take a breather after their massive run. Word that rival SMA Solar expects a drop in margins because of shrinking solar subsidies hasn't helped investors' confidence. Power-One has responded to the drop by announcing a buyback program, while insiders have picked up some shares of their own. And despite the stock's rapid rise over the past year, some CAPS members still like the company's long-term prospects. Roughly 84% of the 196 members rating Power-One are bullish.

National Bank of Greece
National Bank of Greece recently posted an expected steep drop in second-quarter profit, and later took investors by surprise with an announcement to raise nearly 3 billion Euros in a rights issue. The bank recently passed the European stress tests, along with European bank peers like Banco Santander (NYSE: STD  ) , and Royal Bank of Scotland (NYSE: RBS  ) . However, National Bank of Greece needs to get used to that procedure; Greece has agreed to test its banks quarterly. 

Putting the increased scrutiny aside, the additional capital will help bolster NBG's balance sheet ahead of its stress test later this year. Many CAPS members remain bullish on the banking giant. About 96% of the 1,341 CAPS members rating National Bank of Greece see it outpacing the market averages.                           

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 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.

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Fool contributor Dave Mock habitually looks for silver linings in even the darkest of clouds. He owns no shares of companies mentioned here. The Fool owns shares of National Bank of Greece.

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 is made of sugar and spice and everything nice.


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