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4 Superball Stocks

http://www.fool.com/investing/general/2012/11/17/4-superball-stocks-3.aspx

Rich Smith
November 17, 2012

When stocks fall fast and far, they sometimes set themselves up for remarkable rebounds. The following equities suffered dramatic drops over the past week. With help from the 180,000 members of Motley Fool CAPS, we'll see whether any of them have the potential to bounce back.

It's been a while, but thanks to last week's sell-off, we once again have a chance to stand beneath Mr. Market's silverware drawer in hopes of snagging a bargain. Let's meet today's contenders:

Companies

 

How Far From 52-Week High?

Recent Price

CAPS Rating (out of 5)

InvenSense (NYSE: INVN  )

-56%

$9.78

*****

3D Systems (NYSE: DDD  )

-19%

$38.04

****

Baidu.com (Nasdaq: BIDU  )

-40%

$92.68

***

Molycorp (NYSE: MCP  )

-83%

$6.13

**

Companies are selected by screening on finviz.com for abrupt 5% or greater price drops last week. Recent price and 52-week-high data provided by finviz.com. CAPS ratings from Motley Fool CAPS.

Four super falls -- one superball
Last week was another rough one for investors. Across the length and breadth of the markets, some 5,000 separate stocks exited the week lower than they entered it -- and that was the good news. The bad news was that many of these companies were literally decimated. Some 500 stocks lost 10% (or more) of their market cap over five days of frenzied trading, including each of the stocks named above. So what went wrong?

Let's start with returning champion Molycorp, making the big-drop list for its second week in a row. (Congratulations?) Last time around, as you may recall, Molycorp was suffering the aftereffects of a revelation that the SEC was questioning the "accuracy of the Company's public disclosures." Now the company's getting hit with a double whammy as The Wall Street Journal  warns of a "sharp fall in prices" of rare earth minerals. Prices of some rare earths, says the Journal, are down "as much as 80%," and the situation's starting to look a lot like "a supply glut." Not good news for Molycorp.

At the same time, another big-name journal -- Forbes this time -- was criticizing Baidu for fumbling the transition to mobile search ... even as rival Qihoo 360 (NYSE: QIHU  ) appears to be making a move there with a new mobile browser. If you're looking for a reason why Baidu recently hit a 52-week low, look no further.

And 3D Systems? You know all about this one already. Over on SeekingAlpha.com, someone's been taking potshots at 3D's accounting for revenue growth. The criticisms might or might not be valid. One thing's for certain, though: With 3D shares still costing 56 times earnings, investors don't have a very big margin of safety if the criticisms prove correct, and growth isn't as gangbusters as it's been made out to be.

And finally, we come to the stock on this week scoring highest on CAPS. The single stock out of the four above the Foolish investors has the best chance of bouncing back: InvenSense.

The bull case for InvenSense
Like the other stocks on today's list, InvenSense had a bad time of things last week, losing 13% of its market cap over five trading days. Unlike the other stocks on the list, though, InvenSense had no bad