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 Wachovia (NYSE:WB) shot up 59% last Thursday as it continued talks with Morgan Stanley for a possible merger. It has been volatile since.

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 115,000 CAPS members to filter out the noise and find companies offering strong momentum.

We'll use our handy CAPS stock screening tool to zero in on companies with a stock price increase of at least 25% in the past four weeks, a market cap of greater than $100 million, and a beta of less than 3.

Here's a sample of stocks our CAPS screen returned:

Company

CAPS Rating
(Out of 5)

Four-Week
Price Change

Markel (NYSE:MKL)

*****

31.8%

BB & T (NYSE:BBT)

***

43.1%

Wells Fargo (NYSE:WFC)

***

35.6%

GM (NYSE:GM)

*

25.3%

Source: Motley Fool CAPS. Price return from Aug. 22 through Sep. 19.

Diamond in the rough?
Your friends and relatives may report you as being insane should you mention investing in a bank stock these days, but believe it or not there are some gems still hidden among the mess that was once the financial sector. Industry standouts BB&T and Wells Fargo have shown that they are better shielded from bad loans compared to banks like Citigroup (NYSE:C) as neither company has yet to report a quarterly loss due to the financial fallout. BB&T also has a slight edge over Wells Fargo with 0.72% net charge offs as a percentage of total loans compared to Wells Fargo's 1.55%.

BB&T has maintained a more conservative approach to lending and its fundamentals show it. The firm is also sound enough to not only maintain its generous dividend during a period where others are cutting it to weather the credit crisis, but increase it as well. The regional bank also plans to take advantage of the down market by raising $200 million through trust preferred securities to add to its strong balance sheet and fund potential acquisitions.

With a trailing return on equity of 13.7%, some investors see a great opportunity to get a strong performer like BB&T for cheap. While a less-than-overwhelming 83% of the 523 CAPS members rating BB&T agree that the bank will outperform the market in the future, this is far better than sentiment surrounding most banks these days.

Wells Fargo
Smaller, regional banks like BB&T aren't the only ones who have wisely stayed clear of the risky alternative lending products like collateralized debt obligations, national bank Wells Fargo has taken the high road as well. It reported second quarter net income of $1.8 billion, which is down about 21% from a year ago but still ahead of analyst expectations. It also went against the industry trend and raised its dividend.

Warren Buffet loves the business, and many investors think Wells Fargo's position in the current market will allow it to emerge stronger than before. It's setting itself up to pick up market share while others are cleaning up their mess, including potentially bidding for Washington Mutual (NYSE:WM) as federal regulators actively look for a buyer.        

Whether Wells Fargo makes a big play for another beleaguered bank or just picks up smaller firms struggling in the tight market, the fire-sale prices that many firms are trading at gives Wells Fargo an unprecedented opportunity that Chairman Richard Kovacevich likened to being "a kid in a candy store". More than 87% of the 2,555 CAPS members rating Wells Fargo see an opportunity as well and expect it to outperform the 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 5,500 stocks that our 115,000-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.

The Motley Fool Income Investor service scours the market for solid investments like BB&T paying investors money to hold shares. See which dividend paying firms the team is recommending today with a free 30-day trial.

Fool contributor Dave Mock has his own story, but there's no "happily ever after" at the end of it. He owns no shares of companies mentioned here and is the author of The Qualcomm Equation. BB&T is an Income Investor selection. Markel is an Inside Value pick. The Fool owns shares of Markel. The Fool's disclosure policy has the momentum of a freight train, but can stop on a dime.