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 Forest Laboratories (NYSE: FRX) fell nearly 14% last Thursday after an FDA panel voted against recommending its "smoker's cough" drug for approval.

Big drops in share price can sometimes signal material defects or new risks. At other times, they're simply pullbacks along with the larger pessimism facing the market. 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 160,000 CAPS members to make better decisions.

We'll use CAPS' handy stock screening tool to quickly zero in on companies with two factors: Their prices have fallen at least 15% in the past four weeks and they have a market cap greater than $100 million.

Source: Motley Fool CAPS.
^March 19 through April 13.

Compellent Technologies
Network storage solution provider Compellent Technologies is expecting year-over-year revenue growth in the first quarter, but thanks to delays in some large orders, its recently lowered guidance won't live up to Wall Street estimates. Adding more downward pressure on shares, a Canaccord Adams analyst downgraded Compellent and other major players in the storage sector. In commenting on the downgrade for Qlogic (Nasdaq: QLGC) and others, the analyst said, "While near-term indicators have shifted to 'yellow,' we want to be clear that our concerns are tactical in nature," due to expected slower demand for the summer.

Beyond near-term predictions, some CAPS members like the long-term outlook for storage, and 86% of the 126 members rating Compellent remain bullish, but its two-star rating is at the lower end of the scale compared with others like five-star EMC.

Telestone Technologies
Shares of Telestone Technologies have made a huge run in the past year as the company has seen explosive growth. Its major wireless carrier customers include China Mobile (NYSE: CHL), which has been expanding its 3G networks at a rapid clip. The proof is in the financials: Fourth-quarter revenue more than doubled and earnings grew 58% for the telecom equipment maker. While shares have recently taken a big step back from the near-$25 price reached early this year, they are still trading at prices not seen in years.

Many CAPS members see long-term upside potential for the company, with about 87% of the 192 members who rated Telestone Technologies expecting it to outperform the broader market.         

A-Power Energy
As energy companies like BP and First Solar recently decided to shift renewable energy jobs out of the U.S., A-Power looks to build a presence here, with plans to build a wind turbine plant in Nevada. That's one of many large moves the company has recently made to expand its reach and remain relevant in the U.S. market.

But shares have headed south this year after a dilutive private placement offering in January, which was followed by a 2010 revenue forecast that came in lower than Wall Street's estimates and an announcement of a quarterly loss.

Even though the company's shares have given investors a wild ride since its IPO, many CAPS members still hold onto their bullish long-term view, as 97% of the 991 members rating A-Power Energy believe it will be a market-beating investment.

Ultimately, whether 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 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.