Can These Stocks Bounce Back?

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However hard the market slams a stock, there's always the chance it'll come bouncing right back. We'll consult our Motley Fool CAPS community to find shares on the rebound, examining one specific sector of the economy in search of companies with rising CAPS ratings.          

There are 99 stocks listed under "materials & construction" in the CAPS' screener, but more than a handful of them carry well-respected four- and five-star ratings. Those accolades mean our 170,000 CAPS members are confident that these stocks will beat the market in the months ahead, but let's see what members are saying about the ones below:


CAPS Rating Today (out of 5)

Recent Price

52-Wk Price Change


5-Yr. Growth Rate

EnergySolutions (NYSE: ES  )





Pope Resources (Nasdaq: POPE  )





Shaw Group (Nasdaq: SHAW  )





Sources: Motley Fool CAPS; Yahoo! Finance.

The markets may be feeling better about the economy after a few reports have offset much of the drumbeat of negativism we've seen, but with the S&P 500 up 11% over last year, CAPS materials and construction stocks haven't done nearly as well. The average stock is up less than 9% from the year-ago period.

Aside from the returns from EnergySolutions above, also hurting the sector's performance was that of Tri-Tech Holdings, a Chinese wastewater treatment specialist, dragged down 50% because of the shenanigans pulled by RINO International (Nasdaq: RINO  ) .

So let's take a closer look at why investors think that some of these other companies won't be jumping from the frying pan into the fire now that the markets are roiled again.

Some spring in its step
It's hard enough figuring out what to do with spent nuclear waste from domestic suppliers, but disposal specialist EnergySolutions caused Utah to go nuclear when it wanted to send international waste there.

Through long-term contracts with customer utilities like Exelon  (NYSE: EXC  )  and Duke Energy  (NYSE: DUK  ) , EnergySolutions handles a large portion of the nuclear waste from power plants in the U.S. It also has a large international presence, and it was its desire to dispose of waste from Italy in Utah's desert -- one of only 36 facilities available to the states -- that a firestorm of protest erupted.

A court, however, ruled that Utah could veto disposing the foreign nuclear waste on its soil and EnergySolutions says it won't appeal since the move doesn't impact its domestic operations. But with international customers accounting for more than half of EnergySolutions' revenues, there's potential for a meltdown.

International markets are where nuclear power is really heating up. Shaw Group is one looking to help Saudi Arabia go nuclear in the next couple of years by building new plants. The UAE is looking to start building soon, and Kuwait wants to have four plants operations by 2020. No doubt it's a curious statement that oil-producing superpowers want to devise alternative energy sources.

Regardless, the nuclear EnergySolutions remains a popular investment among CAPS members where 97% of those rating the waste disposal company -- and 100% of the All-Star members -- believe it will still cook up market beating results. And TMFSmashy thinks Shaw's nuclear muscle power is worth doubling down on.

Is nuclear waste too hot for your portfolio? Add it to your stock watchlist and keep an eye on all the Foolish news and analysis about it.

A righteous rocket
The CAPS community has a similarly high opinion of forestry manager Pope Resources, which apparently think money grows on trees after watching its stock soar 31% over the past quarter. While it wasn't divine intervention either that helped Pope grow to the trees, a number of names in the sector set down roots and sprouted as well. Louisiana-Pacific was up 22%, and International Paper (NYSE: IP  ) rose 16%.

With Pope paying a dividend currently yielding 2.9%, the timber husbandry specialist offers an attractive investment. He probably won't be excommunicated, but only one All-Star CAPS member is ready to cut Pope down, no doubt reflecting the general consensus that timber management remains a stable, profitable venture. Let us know on the Pope Resources CAPS page (or in the comments section below) if you think this timber company can grow from an acorn into a mighty elm.

The ball's in your court
There are many factors that go into whether a stock is a buy or sell, so it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made all from a stock's CAPS page. Head over to CAPS today and share your thoughts with other investor analysts on whether you think these stocks are ready to bound higher.

Exelon is a Motley Fool Inside Value selection. Motley Fool Options has recommended writing covered calls on Exelon. The Fool owns shares of EnergySolutions. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 

Fool contributor Rich Duprey does not own any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.

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10/25/2016 4:02 PM
DUK $78.59 Up +0.19 +0.24%
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