More Than Momentum: Stocks Rising for a Reason

Even on the market's worst days, buyout news and other short-term forces can send individual stocks up by 10%, 25%, even 50%.

For example, when EMC's (NYSE: EMC) courting of Iomega finally ended with a sweetened $213 million offer, stock in the storage device maker had risen 44% since it spurned EMC's initial overture early in March.

But beyond one-time blips like this one are stocks with fundamentally compelling reasons for recent momentum. 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 investors' opinions do more to shape each company's rating than the picks of their poorer-performing peers do. Let's use the collective wisdom of more than 96,000 CAPS investors to filter out the noise and find companies displaying strong momentum.

We'll screen for companies with a stock price increase of at least 30% in the past month, a market cap of greater than $100 million, and a beta of less than 3. That'll keep us clear of the wild, pump-and-dump land of penny stocks.

Here's a sample of stocks our screen returned:

Let's burrow down through this list of stocks that have thumped the market in the past month, and find out the story behind the numbers.

Bio momentum
In attempts to realize more value for shareholders, PDL Biopharma had been shopping its business around before finally pulling the plug on the effort last month. The news that the company didn't get an anxious buyer and would instead cut jobs to restructure the company sent the stock into a tailspin. But recent news that the biotech firm would spin off a portion of its business and pay a healthy dividend has investors excited again.

The new plan calls for shareholders to receive a $4.25-per-share dividend, funded by roughly $500 million in spoils the company raked in when it sold off pieces of its marketed drug portfolio. The company will then split into two publicly traded entities -- one holding the rights to its antibody humanization royalty assets, and the other containing the rest of its biotechnology operations, with the promise in a pipeline of drugs in development.

PDL plans to capitalize the new biotech company with $375 million in cash designed to sustain operations for about three years while it advances the development of drugs toward commercialization. CAPS investors in general see lots of promise in the company, maintaining a four-star rating for most of the past six months. Optimism with the new dual-company structure has kept PDL Biopharma in the bull camp, too, with 480 out of the 509 investors who've rated the company believing that it will beat the S&P going forward.

Driving for dollars
With U.S. automakers spinning in circles while foreign automakers race by, it's been tough to like Ford as an investment over the past decade. But recent momentum in shares speaks of a potential turnaround at the company -- or, at least, investors' belief that there is value in the American icon that the market has missed.

Ford's woes have been recounted already -- a plethora of causes that have led to sagging sales in the face of stiff competition, and exposure to credit-strapped customers through its financing division. But the recent sale of the Jaguar and Land Rover lines to Tata Motors (NYSE: TTM) gives Ford the opportunity to renew its focus on its core line.

With a meager two-star rating in CAPS, Ford has just managed to pull away from the bottom-feeding one-star rank it's held for the lion's share of the past six months. Of the 826 All-Star investors rating the company, 325 are now bullish on shares. Not a majority by any stretch, but interest in the stock has generated more than 1,000 opinions written on Ford.

What's your story? Whether you buy the tale of a soaring or a souring stock, 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 5,500 stocks that our 96,000-plus investors have covered in Motley Fool CAPS. It's totally free to be a part of the community, and the payback is all for you.