5 Stocks in a Tailspin

Individual stocks can surge by 10%, 25%, or even higher in a short period of time. And they can fall just as far, just as quickly. For example, last week, shares in heavy-equipment manufacturer Terex (NYSE:TEX) dropped by 30% as investors dumped shares following its announcement of a $421.5 million loss and a 20% drop in revenue in the fourth quarter.

Big drops in share price can sometimes signal material defects or new risks. But at other times, they're simply pullbacks after a long run-up. 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 125,000 CAPS members to make better decisions.

We'll use CAPS' handy stock screening tool to quickly zero in on companies whose prices have fallen at least 25% in the past four weeks and have a market cap greater than $100 million and a beta of less than 3. If you want to run this screen for yourself, please do -- just keep in mind that the results will update with the market.

Source: Motley Fool CAPS. Price return from Jan. 23 through Feb. 17.

Vornado Realty Trust
Many real estate investment trusts, including Vornado and Aimco, are trying to conserve cash by issuing stock as part of their dividends. Vornado recently said it would pay 60% of its dividend in stock, which shareholders probably wouldn't mind so much if the stock were actually going up -- and it's not. With many observers expecting commercial real estate developers to see more vacancies and declining rents in the future, it's little surprise that fewer than 48% of the 316 CAPS members rating Vornado are bullish today.

BB&T
BB&T beat analysts' estimates by four cents in the fourth quarter, but the stock has retreated to a 13-year low, thanks in part to a Citigroup downgrade. CAPS members are split on the bank, with many investors joining Wall Street analysts concerned about the financial impact of real estate loan losses in Georgia and Florida. But a solid group of them -- 86% of the 677 members rating BB&T -- see cheap shares of a well-run company that they expect to outperform the market going forward.

Apollo
Another company swimming in shark-infested waters, business-development firm Apollo Investment posted a 27% rise in fiscal third-quarter earnings but also a 28% drop in its book value. The company took the opportunity to cut its dividend in half as well, a move that sent shares falling even further. The dividend still yields more than 20%, and many CAPS members are still bullish on the company, despite the prospects of lending money to businesses during difficult times. Today, nearly 97% of the 956 CAPS members rating Apollo Investment expect it to beat the S&P.

Sequenom and ViroPharma
The health-care sector is often considered defensive during dour economic climates, but that doesn't mean stocks can't get whacked from time to time. Sequenom's shares deflated after the genetics and molecular-diagnostics company posted a higher-than-expected fourth-quarter loss of $15.4 million, partially because of development costs for its Down syndrome test platform, SEQureDx. Many CAPS members are encouraged by the progress in getting the test to market, though, and 83% of the 315 members rating the company still expect it to outperform the market.

Drugmaker ViroPharma got its own dose of reality medicine when it announced that its drug maribavir, which it licensed from GlaxoSmithKline (NYSE:GSK), might not even hit the store shelf. The drug recently produced poor test results against cytomegalovirus (CMV) disease. Shares got whacked by 50% in very short order, but many investors still see lots of life left in ViroPharma's other products. In CAPS, 96% of the 1,222 members rating ViroPharma see it beating the market.

Ultimately, whether or not 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 nearly 5,400 stocks that 125,000-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.