5 Stocks Bucking the Downtrend

Even on the market's worst days, buyout news and other short-term forces can send individual stocks up by 10%, 25%, even 50%.        

For example, shares in DreamWorks Animation jumped 25% when it more than doubled its quarterly profit.

But beyond less-predictable events like that one are stocks with fundamentally compelling reasons for recent momentum. The trick is to find those stocks. That's where Motley Fool CAPS comes in.

The story behind the story
CAPS is no crowd of lemmings. Its best-performing members' opinions do more to shape each company's rating than the picks of their poorer-performing peers. Let's use the collective wisdom of more than 130,000 CAPS members to filter out the noise and find companies offering strong momentum.

We'll use CAPS' handy stock screening tool to quickly zero in on companies with a stock price increase of at least 30% in the past four weeks, a market cap of greater than $100 million, and a beta of less than 3. Below is a sample of stocks that our screen returned. If you'd like, run this screen yourself -- just keep in mind that results may change as the market does.

Source: Motley Fool CAPS. Price return from April 3 through May 1.

Bad can be good
The purchase of U.K.-based cooking equipment supplier Enodis helped push Manitowoc’s first-quarter revenue up slightly to just over $1 billion. Excluding $729 million in impairment charges and other items, the company’s earnings of $0.18 per share beat analysts’ expectations. But backlog declined for the third straight quarter and the company expects crane sales to continue to face pressure going forward, similar to Caterpillar’s weak outlook.

Although operating cash flow was negative in the first quarter, Manitowoc expects that to change over the balance of the year, with significant cash flow still seen in the future to help it pay down debt. But the cash may not come fast enough to avoid a violation of a debt covenant, so in a move similar to competitor Terex, Manitowoc plans to seek covenant waivers on its credit facility. Even with the risks associated with the recent acquisition and accompanying debt, 97% of 1,719 CAPS members rating Manitowoc expect it to beat the market.

One out of three ain't bad
Ford is still losing money, but many investors think it's in a better position than rivals GM or Chrysler. Chrysler is taking its turn through government-endorsed Chapter 11 bankruptcy, and GM may be next in line as it approaches a June 1 restructuring plan deadline. Showing that bad news can be good news, Ford’s $1.8 billion loss in the first quarter was better than Wall Street analysts expected, and it has dramatically cut its cash burn rate, giving investors reason to bid up the stock.

First-quarter market share slipped, while foreign competitors Toyota (NYSE:TM) and Honda (NYSE:HMC) gained. But sales increased from March to April, with Ford picking up retail share thanks in part to its fuel-efficient Fusion gaining traction with record sales in April. In the long term, Ford hopes to pick off customers from floundering competitors GM and Chrysler, and separate itself from the two in the public’s mind.

The company still believes it won't need any government aid, as it has been successful in gaining some concessions in labor and bondholder deals as part of its restructuring strategy. It also looks to work with dealers to help it remain viable, but concerns remain over how the industry’s suppliers will be affected by problems at GM and Chrysler. If a significant portion of the supply chain craters, Ford will suffer with them. It's no surprise then that just short of 65% of the 7,002 CAPS members rating Ford are bullish today.

And you?
What's your story? Whether you buy the tale of a stock that's soaring or souring, your own research is more important than collective opinions. But these collective opinions can make your due diligence a whole lot easier.

Add your take on these or any of the more than 5,300 stocks that our 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.