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 in Exelixis
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 135,000 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 30% in the past four weeks, a market cap of greater than $100 million, and a beta of less than 3. Below is a sample of stocks that our screen returned. If you'd like, run this screen yourself -- just keep in mind that results may change as the market does.
|
Company |
CAPS Rating
|
4-Week |
|---|---|---|
|
Petro-Canada |
***** |
31.9% |
|
Yamana Gold |
**** |
46.6% |
|
El Paso |
**** |
37.5% |
|
Goldcorp |
*** |
44.4% |
|
Capital One Financial |
* |
40.9% |
Source: Motley Fool CAPS. Price return from May 1 through May 29.
Gold diggers
While the U.S. dollar revisits low levels once again, precious metals such as gold and silver, and even oil, have been going up in price, sending shares of commodity producers like Yamana, Goldcorp, Silver Wheaton
Many CAPS members see all the makings of future inflation, when defensive investments will be far more attractive than alternatives, and hence are bullish on gold and producers like Yamana and Goldcorp. But it's not unanimous, and there's clearly some investors still hedging on investments in gold miners at this point. Looking at the community statistics, nearly 97% of the 3,524 CAPS members rating Yamana expect it to outperform the market, while a less convincing 92.5% of the 1,952 members rating Goldcorp are bullish on its shares.
Gas up
El Paso is not only one of the largest natural gas transporters in the U.S., but also explores for and produces gas, working alongside players like Chesapeake Energy and Devon Energy in the Haynesville Shale, among other places. Huge writedowns in the exploration and production part of the business led El Paso to post a loss of $978 million in the first quarter, but without taking these into account, adjusted earnings far surpassed the average expectation of Wall Street analysts, sending shares on a nice run. Overall, the company's revenue climbed 17% and cash flow from operations grew 20%, with positive free cash flow to boot, so it's not so hard to see why investors were happy about core operations.
With a good read on both the supply and demand sides of natural gas, El Paso's management still sees pressure on gas prices in the short term. But it sees strength in gas in the long term, especially with the increased focus on reducing carbon emissions. Many CAPS members also anticipate increased natural gas use in the U.S. and anticipate plenty of room for growth at El Paso. Today, nearly 97% of the 741 CAPS members rating El Paso expect it to beat 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 135,000-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.
