5 Stocks Breaking Out

Volatile markets seem to be the norm these days, as stocks gyrate through ups and downs on a daily basis. But sometimes buyout news and other short-term forces can send individual stocks soaring by 10%, 25%, even 50% -- even on the market's worst days. 

For example, shares of chip maker Techwell rose 48% one day recently, after news broke that Intersil would buy the company for about $400 million in cash.

But beyond less-predictable events like that one are stocks with fundamentally compelling reasons behind a big move. The trick lies in finding those stocks. That's where Motley Fool CAPS comes in.

The story behind the story
CAPS is no crowd of lemmings. Its best-performing members' opinions do more to shape each company's rating than the picks of their poorer-performing peers. Here's an example of how we can use the collective wisdom of more than 160,000 CAPS members to filter out the noise and find companies with strong potential.

We'll use CAPS' handy stock screening tool to quickly zero in on companies with a stock price increase of at least 20% in the past four weeks, a market cap of greater than $100 million, and a beta of less than 3. Then we can use the insight of the CAPS investment community to add some context to these market movers.

Source: Motley Fool CAPS. Price return from March 5 through April 1.

IMAX
IMAX shares have soared 290% over the past year, as its 3-D movie experience gains popularity among moviegoers. Revenue nearly doubled in its most recent quarter, and blockbusters like Avatar and Disney's (NYSE: DIS) Alice in Wonderland have become big draws for ticket sales. Avatar introduced millions of new moviegoers to IMAX, and the company believes it has also helped increase studios' and filmmakers' awareness of the value proposition behind 3-D. As the lineup of IMAX-formatted films to be released this year from studios like DreamWorks Animation and Time Warner's (NYSE: TWX) Warner Bros. grows, IMAX technology is quickly finding its way into more theaters. 

At the end of the fourth quarter, the company's backlog stood at 136 theater systems, and its popularity is expanding internationally, with multiple deals struck in Asia. The company expects that strength to continue. Many CAPS members express the same confidence; 91% of the 1,195 CAPS members who've rated IMAX expecting it to outperform the broader market.

GameStop
Investors in GameStop have watched painfully as the stock dwindled over the past few years. But shares of the video game retailer have taken a turn for the better in recent weeks. While the stock received a bump from rumors floating around about a possible takeover, the company joined electronics retailer Best Buy in providing a rosier outlook for this year, which also rallied more bulls into the stock. 

GameStop's progress suggests it may have shaken off a fiscal fourth quarter plagued by falling same-store-sales and lower earnings, along with January's subsequent drop in video game industry sales. The company expects new game sales to improve this year. Despite competitive threats -- including aggressive video game pricing from Wal-Mart Stores (NYSE: WMT), and the testing of video game rentals from Coinstar's (Nasdaq: CSTR) Redbox -- GameStop remains optimistic, and retains a strong position in the higher-margin used-game business. While some CAPS members are still cautious, roughly 95% of the 3,280 CAPS members who've rated GameStop consider it a market-beating investment.

And you?
What's your story? Whether you think a stock is soaring or souring, your own research is more important than collective opinions. But these insights can make your due diligence a whole lot easier.

Add your take on these or any of the 5,400 stocks that our 160,000-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.