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, American Depository Receipts of Indian company Satyam dropped more than 84% on Monday, their first day back on the market after the New York Stock Exchange froze trading of the shares last week because of the company's accounting fraud scandal.

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 that have been slashed by at least 20% in the last four weeks, and which 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.

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


CAPS Rating
(out of 5)

Price Change

Raser Technologies (NYSE:RZ)



Simon Property Group (NYSE:SPG)



MetLife (NYSE:MET)









Source: Motley Fool CAPS. Price return from Dec. 19 through Jan. 12.

Raser Technologies
Recent listing on the New York Stock Exchange hasn't helped boost shares of geothermal power developer Raser Technologies yet. The company's shares have fallen nearly 80% from where they stood a year ago. Lack of positive cash flow and plenty of long-term debt keeps many investors weary. While some investors believe patience will be rewarded as Raser transitions to a commercial operation, only 45% of the 655 CAPS members rating Raser Technologies expect it to outperform the market.

Simon Property Group
Highly leveraged REIT mall operators like Simon and General Growth Properties (NYSE:GGP) have been hit hard by the economic downturn as slowing consumer spending heralds tough times for retailers. And even though the government is making bold moves to jumpstart the economy, many investors expect real estate values to remain depressed for quite awhile. Many are betting real estate will go lower, since only 48% of the 438 CAPS members rating Simon Property Group see it beating the market.

The U.S. life-insurance sector has faced increased liabilities and lower asset values, making it difficult to maintain solid capital positions and avoid credit downgrades that could lead to higher costs or lost business. Fortunately, MetLife was able to raise $2.3 billion in a stock offering in October, joining Hartford Financial (NYSE:HIG) in bringing in additional needed capital. Many CAPS members think MetLife will hold up better than others because of its size and diversification; 90% of the 621 members rating the company are bullish.

CIT Group
Following a third-quarter loss of $317.3 million, commercial finance firm CIT Group reported last week that it expects to post another loss in the fourth quarter. The company became a bank holding company to qualify for $2.3 billion in government bailout money, giving some investors new optimism that CIT can capitalize on its sweet spot of lending to midsized and small businesses as the Fed works to unfreeze the market for small-business loans. CAPS members rating CIT Group are split on the company's prospects, with 69% believing shares will outperform the market.

Investors recently knocked down shares of both SINA and Focus Media following the announcement that SINA would buy Focus Media's digital outdoor advertising businesses. Some see risk in integration challenges, a change in corporate strategy, and increasing competition in China's advertising market. In addition, SINA was recently caught up in China's Internet pornography crackdown, accused by the government of not acting quickly enough to eliminate immoral content from sites. Still, 95% of the 735 CAPS members rating SINA see long-term growth and 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 125,000-plus members have covered in Motley Fool CAPS.

Beginning Jan. 12, 2009, Fool co-founder David Gardner, Jeff Fischer, and their Motley Fool Pro team will accept new subscribers to their real-money portfolio service. Motley Fool Pro is investing $1 million of the Fool's own money in long and short positions in a range of securities, including common stocks, put and call options, and exchange-traded funds (ETFs). They also incorporate proprietary CAPS "community intelligence" data into their research. To learn more about Motley Fool Pro, and to receive a private invitation to join, simply enter your email address in the box below.

Fool contributor Dave Mock habitually looks for silver linings in even the darkest of clouds. He owns no shares of companies mentioned here. Focus Media Holding is both a Motley Fool Global Gains and Rule Breakers pick. SINA is a Stock Advisor pick, while Satyam is a former pick. The Fool's disclosure policy is made of sugar and spice and everything nice.