Individual stocks can rise 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 Ann Taylor Stores fell 38% on Friday after the women's apparel company reported a wider net loss and declining sales for its fourth quarter.

Big drops in share price can sometimes signal material defects or new risks. But at other times, they're simply pullbacks along with the larger pessimism facing the market today. 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 130,000 CAPS members to make better decisions.

We'll use CAPS' handy stock screening tool to quickly zero in on companies whose prices have fallen by at least 30% in the past four weeks and that 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 your results will update as the market changes.


CAPS Rating
(5 stars max.)

Price Change

Prudential Financial (NYSE:PRU)



Energy Conversion Devices (NASDAQ:ENER)



Tesoro (NYSE:TSO)









Source: Motley Fool CAPS. Price change from Feb. 13 through March 10.

Prudential Financial
Standard & Poor's recently cut credit ratings on 10 life insurers, including MetLife and Hartford Financial, citing declines in the equity market and a difficult environment ahead. Prudential's rating was affirmed, but its core operating subsidiaries were cut a notch. And two analysts at Friedman, Billings, Ramsey are predicting more credit losses across the industry. Expecting more bad news, some CAPS members see little reason to buy Prudential at this point, and only 83% of the 522 members rating Prudential expect it to beat the market.

Energy Conversion Devices
Thin-film solar maker Energy Conversion Devices produced stronger-than-expected revenue in its latest quarter, generating high-than-expected profits. But as LDK Solar (NYSE:LDK) did, Energy Conversion Devices forecast lower revenue in the coming quarters. The credit markets have weighed on solar suppliers, making it difficult for customers to get financing. Still, many are optimistic about the long-term potential of Energy Conversion Devices' products, and 93% of the 1,043 CAPS members rating the company are bullish.

The economy has cut demand for oil products, and companies such as ConocoPhillips (NYSE:COP) and Tesoro have altered operations to adjust. As demand for gasoline has fallen, Tesoro has focused on other products, helping increase fourth-quarter margins by 51% and leading to earnings that topped estimates. But while the company expects lower year-over-year production from its refineries in this quarter, refining margins are looking much better these days. Thus, nearly 94% of the 959 CAPS members rating Tesoro look for it to outperform the S&P.

JDS Uniphase
Communications equipment maker JDS Uniphase is adapting to the downturn by cutting payroll, closing factories, and becoming more flexible. It took a 10.6% hit to revenue in its most recent quarter and nearly $700 million in impairment charges. But the company still has free cash flow and $678 million in cash and short-term investments, while peer Nortel Networks, which has filed for bankruptcy protection, has been crushed. Although JDS Uniphase still is on solid footing, only 80% of the 639 CAPS members rating the company think it will beat the market.

Nuclear energy company USEC reported a 30% drop in fourth-quarter revenue, and earnings came in below analysts' expectations. But the company said it expects a "dramatic rebound" in revenue for 2009 as volume and prices in its separative work unit improve. Despite the stock's recent drop, many CAPS members express a positive outlook on nuclear energy in the U.S., with 96% of the 1,220 members rating the company expecting it to beat 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 more than 5,300 stocks that 130,000-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 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 31 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.The Fool's disclosure policy is made of sugar and spice and everything nice.