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 in Fifth Third Bancorp dropped more than 28% when the company announced a quarterly loss exceeding $2 billion, amid loan defaults that just keep piling up.

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 on how to invest their money.

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. 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

Deutsche Bank (NYSE:DB)



State Street (NYSE:STT)






Evergreen Solar (NASDAQ:ESLR)



Aflac (NYSE:AFL)



Source: Motley Fool CAPS. Price return from Jan. 2 through Jan. 26.

Deutsche Bank
Exposure to bad American debt, the sinking European economy, and rising unemployment are only a few of many concerns surrounding European banks such as Germany’s Deutsche Bank, London’s Barclays (NYSE:BCS), and France’s BNP Paribas. Deutsche Bank recently announced that it expects to post a 2008 loss of $6.3 billion while it continues to get rid of bad investments, sending shares farther down

The bank will report its first annual loss in five decades, as the company closes some proprietary trading businesses and restructures other operations. With most expecting the company's troubles to get worse before they get better, only 58% of the 529 CAPS members rating Deutsche Bank expect it to outperform the market.

State Street
On the other side of the pond, many U.S. banks remain on financial life support. State Street reported double-digit growth in income and revenue for 2008, but shares in the institutional banking firm were knocked down on news of a 71% drop in fourth-quarter earnings and projections for a flat 2009. CAPS members are feeling weak in the knees, and only 69% of the 459 members rating State Street see it beating the market.  

The good times have given way to some serious punishment in the solar sector as companies like SunPower and Suntech Power (NYSE:STP) begin to deteriorate along with the broader economy. Several analysts recently gave a weak outlook for SunPower in 2009 with uncertain demand from markets like Spain, where a large amount of its revenue is generated. But many CAPS members see brighter days ahead, as 88% of the 1,502 rating SunPower remain bullish.

Evergreen Solar
As future earnings estimates continue to get dialed down, many companies are making moves to save cash. Evergreen Solar recently shut down its Marlboro, Mass., facility, and it will be hit with as much as $30 million in charges in the fourth quarter. But the company said production in the fourth quarter was in line with what it had previously announced, and its ramp-up in capacity at its Devens, Mass., facility is on schedule to hit its planned goals in the second half of 2009. Even with the sector weakness, 92% of the 1,954 CAPS members rating Evergreen Solar expect it to beat the market.

Aflac's shares have taken a big hit lately, reaching multiyear lows as investors grow concerned with potential losses from significant holdings of European hybrid securities. Any nationalization of banks that hold the securities could pose a huge risk to those assets, a scenario which has several analysts fretting over potentially big losses. But while the risks are real, some investors consider the reaction overdone, and think that the stock is a bargain at these levels. In CAPS, 95% of the 1,147 members rating Aflac remain on the long side.

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 5,400 stocks that 125,000-plus members have covered in Motley Fool CAPS.

The Motley Fool Stock Advisor service looks for companies with strong management poised to beat the market over the long haul. To see all the stocks that have helped Tom and David Gardner beat the market by 30 points on average, take a free 30-day trial.

Fool contributor Dave Mock habitually looks for silver linings in even the darkest of clouds. He owns no shares of companies mentioned here. Suntech Power Holdings is a Rule Breakers recommendation. Aflac is a Stock Advisor selection. The Fool's disclosure policy is made of sugar and spice and everything nice.