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3 Stocks Bucking the Downtrend

By Dave Mock - Updated Apr 5, 2017 at 8:08PM

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Sorting a real growth story from a flash in the pan.

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 cosmetic-product and breast-implant maker Mentor jumped 89% when Johnson & Johnson announced it would pay nearly double the previous closing price per share to acquire the company.

But beyond less predictable events like that one are stocks with fundamentally compelling reasons for recent momentum. The trick lies in finding them -- and 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 120,000 CAPS members to filter out the noise and find companies offering strong momentum.

We've used CAPS' handy stock screening tool to quickly 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)

4-Week
Price Change

Kinross Gold (NYSE:KGC)

****

41.4%

Newmont Mining (NYSE:NEM)

****

27.8%

Force Protection (NASDAQ:FRPT)

***

42.7%

Source: Motley Fool CAPS. Price return from Oct. 31 through Nov. 28.

Follow the yellow bricks
Many precious-metals miners, including Kinross, Newmont Mining and Gold Fields (NYSE:GFI), have seen their stocks rally recently on rising gold and silver prices. Investors already know what a strong spot price for gold can do for Canadian-based Kinross -- the company reported a 64% rise in third-quarter profits, as realized gold prices came in at $857 an ounce, up from $686 last year. The company's low-cost Kupol mine in Russia is also operating ahead of schedule. It's one of three new operations opening this year that are expected to boost production and lower overall costs. Kupol produced 206,495 ounces in the quarter, bringing the company's overall gold equivalent production to 551,550 ounces, a 47% increase.

Kinross has also been taking advantage of other companies' debt struggles. It made agreements with Teck Cominco (NYSE:TCK) and Anglo American to acquire the Lobo-Marte gold project in Northern Chile for about $250 million, or about $42 per ounce of gold in the ground. Kinross said the deal will add about 5.9 million ounces of resources to the front of its development pipeline. The company could even use its existing La Coipa mill to process ore from the new project.

Many investors favor gold stocks like Kinross as a hedge against inflation, particularly when the economy gets rattled to the bone. In CAPS, 96% of the 1,280 members rating Kinross expect it to outperform the market.

It's the bomb
Force Protection and fellow defense contractors Boeing (NYSE:BA) and Northrop Grumman got blown out when the Pentagon awarded its Humvee-replacement contract to General Dynamics, Lockheed Martin (NYSE:LMT), and Navistar. Still, the company continues to bring in solid revenue from building, repairing, and servicing plenty of MRAPS -- mine-resistant ambush-protected vehicles. In Force's third quarter, sales climbed 66% over last year. The company earned $0.29 share, compared to a $0.01 loss last year.

New business keeps rolling in. Force recently received multiple Buffalo vehicle orders, including its first from the United Kingdom. The Canadian government also gave Force Protection a vote of confidence by placing a second order for Buffalo and Cougar vehicles. Since the company's blast-protected vehicles help shield troops from improvised explosive devices -- the highest source of fatalities and injuries in Iraq -- a large number of vehicles are already used in the country, and the company has the potential to sell more for deployment in Afghanistan.

In addition to ongoing service, spare-part, and repair revenues, the additional future revenue opportunities for Force Protection have many investors feeling more bullish these days. Roughly 92% of the 747 CAPS members rating Force Protection expect the company to beat 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 nearly 5,400 stocks that our 120,000-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 Hidden Gems service looks for companies with exceptional management and growth prospects. Check out what other gems lead analysts Tom Gardner and Bill Mann are recommending today with a free 30 day trial to the service.

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. The Fool's disclosure policy has the momentum of a freight train, but can stop on a dime.

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Stocks Mentioned

Force Protection Inc. Stock Quote
Force Protection Inc.
FRPT
Kinross Gold Corporation Stock Quote
Kinross Gold Corporation
KGC
$3.47 (3.58%) $0.12
The Boeing Company Stock Quote
The Boeing Company
BA
$165.89 (0.52%) $0.85
Lockheed Martin Corporation Stock Quote
Lockheed Martin Corporation
LMT
$423.86 (-0.60%) $-2.55
Teck Resources Limited Stock Quote
Teck Resources Limited
TECK
$30.92 (2.66%) $0.80
Newmont Mining Corporation Stock Quote
Newmont Mining Corporation
NEM
$44.78 (0.02%) $0.01
Gold Fields Limited Stock Quote
Gold Fields Limited
GFI
$9.54 (2.69%) $0.25

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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