More Than Momentum: Stocks Rising for a Reason

Even on the market's worst days, headlines and ticker feeds tout soaring stocks. Some juicy rumor or biotech wonder drug seems to be reason enough for a stock to climb 10%, 25%, even 50% -- sometimes in a single day. Sometimes the companies are familiar, but many are names and stories largely unknown among investors.

Often, news of a buyout offer sends a stock rocketing. That's what happened when Celgene (Nasdaq: CELG  ) offered $2.9 billion in cash and stock for Pharmion. Pharmion's stock jumped more than 32% in a single day on the news. But beyond these somewhat unpredictable surges, there are stocks with fundamentally compelling stories behind their recent momentum. The difficulty comes in sifting through the daily trading and news-driven gyrations to find them.

Luckily, there's help right at your fingertips. Motley Fool CAPS is a great tool not only for finding and screening stocks, but also for getting their background information.

The story behind the story
Let's dig right in, using the collective wisdom of more than 74,000 CAPS investors to look past the splashy news and find companies showing strong recent momentum.

We'll screen for stocks showing at least 20% price appreciation in the past month. Then we'll weed out stocks with less than a $100 million market capitalization, and those with a beta of greater than 3. Setting these limits will help us steer clear of the wild, pump-and-dump land of penny stocks.

Here's a broad sampling of stocks our screen returned today.

Company

CAPS Rating
(Out of 5)

1-Month
Price Change

Petroleo Brasileiro (NYSE:PBR)

*****

30.1%

Turkcell (NYSE:TKC)

*****

27.7%

Hecla Mining (NYSE:HL)

****

44.4%

Aeropostale

***

30.5%

Questcor Pharmaceuticals
(AMEX:QSC)

**

334.0%

Data from MSN Money. Star ranking from CAPS. All data as of Nov. 20.

Let's sift further through this list of stocks that have thumped the market over the past month and find out why they've performed so well.

The method behind the madness
CAPS contains a searchable record of its investors' opinions and comments about a company, as well as an overall ranking from its investing community. Lest you think this sounds like following a crowd of lemmings, note that the opinions of the best-performing investors are weighted more heavily than those from poorer-performing participants. Thus, a company's ranking is influenced more strongly by investors who have proved themselves better than the average dart-throwing monkey.

Turkeys on the move
There are no turkeys for investors in Motley Fool Global Gains recommendation Turkcell this Thanksgiving. Stock in the Turkish wireless operator has been on fire, and it's most recent quarterly results added some more stuffing. The leading provider of mobile communications services in Turkey reported a 44% rise in revenue that was backed up by both new subscriber additions and higher spending levels of existing subscribers.

Turkcell added one million new subscribers in the most recent quarter to bring its total base up to 34.8 million. The average revenue per user (ARPU) also shot up 8.5% sequentially, to $15.30. Operators in mature markets, like AT&T (NYSE: T  ) and Sprint Nextel (NYSE: S  ) in the U.S., struggle to add a few pennies or even maintain ARPU levels.

But Turkey's emerging market contributes customers with much higher spending growth. These metrics were partly boosted by the involuntary churn of some of Turkcell's low-value subscribers, which brought overall churn up to 5.7% for the quarter. But Turkcell has done well in promoting various value added services, which made up 11% of net revenue in the quarter. Even with intense competition and rapid changes in the political and economic landscape of Turkey, CAPS investors by and large give Turkcell high marks, with 360 out of 369 investors voting for the company to beat the S&P going forward.

Momentum times four
Pharmaceutical firm Questcor Pharmaceuticals easily takes the momentum prize this week for an incredible rise of nearly 330%. The small cap's surge in revenue from its multiple sclerosis drug in the most recent quarter sent shares north and led to $8.4 million in net income for the firm. CAPS investors are still divided on the long-term prospects of Questcor, however, with one-fourth of the investors rating the company an underperform against the broader market.

What's your story?
Ultimately, the only story that counts is your own. Whether you buy the story of a soaring or a souring stock, your own research is more important than collective opinions. But these collective opinions make an individual's due diligence much easier.

So step right up and chime in with your own take on these or any of the more than 5,200 stocks that investors have covered in Motley Fool CAPS. It's totally free to be a part of the service, and the payback is more than worth it.


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