5 Stocks Bucking the Downtrend

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, shares of mineral-based cosmetics maker Bare Escentuals got an extreme makeover and jumped 42% after Japanese beauty giant Shiseido said it would buy the company for $1.7 billion.

But beyond less-predictable events like that 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 members' opinions do more to shape each company's rating than the picks of their poorer-performing peers. Let's use the collective wisdom of more than 145,000 CAPS members to filter out the noise and find companies offering strong momentum.

We'll use CAPS' handy stock screening tool to quickly zero in on companies with a stock price increase of at least 35% in the past four weeks, a market cap of greater than $100 million, and a beta of less than 3.

Source: Motley Fool CAPS. Price return from Dec. 18 through Jan. 15.

Manitowoc
Beating out Middleby in its bid to acquire Enodis more than a year ago helped boost Manitowoc's customer list with companies like McDonald's, but also loaded its balance sheet with a heavy load of debt. The company has made some progress in deleveraging itself by paying off more than $750 million since the purchase, and investors recently applauded its move to refinance about $400 million in debt, which is expected to enhance its financial flexibility and alleviate some of its covenant concerns. On the operations side, Manitowoc expects some improvement in demand for its food equipment business this year to help offset the weak demand for its cranes, which were once a much larger percentage of its revenue. And while the crane business is ugly right now, many investors expect the company to benefit when heavy construction picks up again. In CAPS, 97% of the 1,818 members rating Manitowoc expect it to outperform the market.

McMoRan
Drilling an ultra-deep prospect in the Gulf of Mexico can be a challenging undertaking, one that even ExxonMobil (NYSE:XOM) has given up on in the past after shelling out big money. But McMoRan's ultra-deep Davy Jones prospect looks to be paying off for McMoRan and its enterprising partners Energy XXI (NASDAQ:EXXI) and Plains Exploration & Production. In 20 feet of shallow water, McMoRan recently drilled to a depth of more than 28,000 feet and scored a gas discovery in what could be one of the largest finds in the Gulf of Mexico, according to the company's co-chairman. The news sent shares of McMoRan and Energy XXI soaring.

Other exploration and production companies such as Anadarko Petroleum (NYSE:APC), Chevron, and BP have also made recent discoveries in the region, and many investors are excited about the renewed potential of the Gulf. The number of drilling rigs in the Gulf of Mexico has declined over the years, due in part to the high cost of drilling there, but McMoRan believes there's still plenty of opportunity for those willing and able to drill to great depths. Since McMoRan owns a massive amount of acreage there, it's easy to see why comments like those create lots of bullish investors. As such, about 95% of the 446 CAPS members rating McMoRan believe it will outperform the broader market.

And you?
What's your story? Whether you buy the tale of a stock that's soaring or souring, 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 5,300 stocks that our 145,000-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.