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 Huntington Bancshares were taken to the woodshed earlier this week, dropping 17% when the company announced it would perform a dilutive preferred stock swap to raise its tangible common equity.

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 that have been slashed by at least 15% in the last four weeks, with 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.


CAPS Rating
(5 stars max.)

Price Change

Developers Diversified Realty (NYSE:DDR)



Internap Network Services (NASDAQ:INAP)


(16.1%) (NASDAQ:SOHU)



Sigma Designs (NASDAQ:SIGM)



American Science & Engineering (NASDAQ:ASEI)



Source: Motley Fool CAPS. Price return Feb. 27 through March 24.

Developers Diversified Realty
Developers Diversified shares have fallen more than 90% in the past year, as the economy hinders many retail REITs' tenants' ability to pay rent, and consumers practice more fiscal restraint. The bad news keeps rolling in, too. The company posted a fourth-quarter loss because of writedowns and abandoned projects, recently had its credit rating cut by Moody's, and will be removed from the S&P 500 index. As such, only a glum 49% of the 347 CAPS members rating Developers Diversified Realty see it beating the market.

Internap Network Services
While some content-delivery providers "disappointed" investors by posting tidy earnings growth in the most recent quarter, Internap joined Level 3 Communications (NASDAQ:LVLT) in reporting a loss. However, Internap posted record annual revenue in 2008, completed its largest organic data center expansion, and now sits on a healthy balance sheet. In CAPS, some 92% of the 263 members rating Internap still expect it to outperform the market.
Shares of Chinese online media firm took a dive following its announcement that it would spin off a stake of its game unit Changyou in an IPO, and analysts rushed to downgrade the stock. The analysts see advantages to keeping the game unit in house, since it has experienced rapid growth with operating margins above 50% due to its flagship fantasy game Tian Long Ba Bu. But Sohu looks to fully tap the growth behind the booming Chinese online gaming market. Today, 95% of the 1,008 CAPS members rating Sohu see it beating the S&P.

Sigma Designs
After a recent run, shares of Sigma Designs have fallen back, as the company posted weaker quarterly earnings and sales than in the year-ago period. A downgrade from Lazard Capital Markets didn't help, either. The analyst cited potentially stiffer competition from Broadcom (NASDAQ:BRCM) in the chip market for set-top boxes for Internet protocol TV. Still, pointing to the company's sequential fourth-quarter revenue growth, the company's CEO stated that demand is beginning to stabilize in Sigma's primary markets. With lots of opportunity left to tap, more than 97% of the 1,556 CAPS members rating Sigma Designs still expect it to outperform the market.

American Science & Engineering (AS&E)
AS&E should have thrown a party when it posted big fiscal third-quarter numbers, with revenue growing 53% to $65.3 million. Those are good results, but more recently, a partially terminated $67.1 million U.S. government contract has drizzled on the company's parade. According to the deal's terms, AS&E will be able to realize only $39.3 million of the original value. Also, a reduction in work backlog has some investors concerned about AS&E, too. Still, 97% of the 993 CAPS members rating AS&E remain bullish.

Ultimately, whether or not you believe a fall in any stock is warranted, your own research is more important than others' collective opinions. CAPS can simply help you 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.

American Science & Engineering, Sigma Designs, and are only a few of dozens of stocks selected by the Motley Fool Rule Breakers service to beat the market over the long haul. To see all the stocks David Gardner and the analyst team have recommended, take a free 30-day trial today.

Fool contributor Dave Mock habitually looks for silver linings in even the darkest of clouds. He owns no shares of companies mentioned here. American Science & Engineering, Sigma Designs, and are Rule Breakers picks. The Fool's disclosure policy is made of sugar and spice and everything nice.