Individual stocks can surge 10%, 25%, or even higher in a short period of time. And they can fall just as far, just as quickly. For example, shares of Capital One (NYSE:COF) flopped 21% Monday along with other credit card lenders amid a broad market decline on expectations of slowing business.

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 120,000 CAPS members to make better decisions.

We'll use CAPS' handy stock screening tool to quickly zero in on companies that have been slashed by at least 30% in the last four weeks, and which have a market cap greater than $100 million and a beta of less than 3.

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


CAPS Rating
(out of 5)

Price Change

Macy's (NYSE:M)



Sprint Nextel (NYSE:S)



Sun Microsystems (NASDAQ:JAVA)



Harley-Davidson (NYSE:HOG)



Intuitive Surgical (NASDAQ:ISRG)



Source: Motley Fool CAPS. Price return from Nov. 7 through Dec. 1.

Apparently those big parade balloons didn’t work so well when it came to lifting shares of Macy's over the hoards of consumers keeping their wallets shut this holiday season. With some investors believing even discount retailers are in a bad situation, Macy's is a long shot in this bleak economy. S&P recently affirmed its credit rating on the company and predicted it will be able to keep its margins in hand with tight cost control. But CAPS members still aren't enthused, with only 60% of the 540 members who’ve rated it bullish on the mall retailer.

Sprint Nextel
Sprint reported third-quarter results that show it still has a ways to go in its attempted turnaround. Its revenue declined 12%, and its customers continued to switch to other carriers like AT&T and Verizon (NYSE:VZ), as its net subscriber loss came in at 1.3 million. With its next-generation WiMax network investment now in the hands of Clearwire, Sprint Nextel can focus on regaining its footing. But CAPS members are split on its chances of success, with only 76% of the 1,343 members rating the company expecting it to beat the market.

Sun Microsystems
Sun Microsystems has seen falling gross margins, and its traditional high-end business has been putting a strain on financial results in a tough tech environment. After reporting a 7% drop in fiscal first-quarter revenue last month, Sun Microsystems joined the crowd with the recent announcement that it would lay off about 15% to 18% of its workforce in an effort to cut costs. The move is expected to save the company between $700 million and $800 million annually, but only 84% of the 1,644 CAPS members rating Sun Microsystems are convinced the firm will be a winning investment going forward.

As shiny new motorbikes tend to fall into the "discretionary spending” category for many, Harley-Davidson has recently seen shares fall as uncertainty surrounds its future earnings potential in a bad economy. Though it met sales expectations for the quarter, Harley lowered its full-year 2008 earnings guidance as its financing division suffers from tighter credit conditions. But missing its earnings mark, and the $9.4 million in writedowns for finance receivables held for sale in its third quarter, has some worried about more pain down the road. Still, at this juncture, nearly 81% of the 1,651 CAPS members rating Harley-Davidson expect it to outperform the S&P.

Intuitive Surgical
Intuitive’s shares have plummeted from its 52-week high, making it a bargain when comparing its current earnings multiple of 23 to the 60ish level of a few years ago. The company has about 1,000 of its da Vinci robots in hospitals across the world, where it earns repeat revenue from sales of accessories. Many CAPS members disagree with Jim Cramer and remain bullish on the company, with its fast-developing field and high barriers to entry. Nearly 95% of the 3,432 CAPS members rating Intuitive Surgical expect it to outperform 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 120,000-plus members have covered in Motley Fool CAPS.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.