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 the nation's third-largest coal producer, Foundation Coal, jumped nearly 21% the day it was announced that its rival, Alpha Natural Resources (NYSE:ANR), would purchase it for $1.4 billion in an all-stock deal.

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. Return from April 24 through May 22.

Waiting to harvest
Fertilizer producers like PotashCorp, Mosaic, and CVR Energy have been waiting for things to get under way on this year's delayed planting season, which has been behind schedule thanks to wet, cold weather. But Wall Street banker Citigroup recently saw some compelling reasons to upgrade PotashCorp, Mosaic, and Agrium (NYSE:AGU), including an environment of tight supply and other factors that will encourage grain prices to move higher.

Many CAPS members also have a positive long-term outlook on the need for fertilizers because adding nutrients offers a compelling financial return for farmers looking to increase their crop yields. Investors still expect an increased demand for food from emerging countries, despite the global financial crisis. In CAPS, members are largely bullish on both PotashCorp and Mosaic -- 96% of the 4,574 members rating PotashCorp expect it to outperform the market, and 96% of the 2,536 members rating Mosaic see it as a market-beating stock, too.

Novavax
Vaccine developers like Novavax and other biotechs like Hemispherx BioPharma have had big jumps in share price recently in reaction to the H1N1 flu breakout as investors place morbid bets in hopes of profiting from a doomsday scenario. The flu strain has so far been shown to be vulnerable to Roche's Tamiflu and GlaxoSmithKline's (NYSE:GSK) Relenza, both antiviral medications, and both Baxter International and Novavax are developing vaccines. Even though neither of the products are approved yet, the companies could see significant benefits if the flu reached a wide-scale pandemic and if they were successful at creating an approved vaccine.

That's a few big ifs at this point, and in the meantime, Novavax posted a wider loss in its most recent quarter because of falling revenue. Many CAPS members still see Novavax as a very speculative investment that can only justify its valuation if it manages to pull off a home run with its H1N1 vaccine. At this point, only 61.4% of the 202 CAPS members rating Novavax are mustering up a bullish vote on the stock.

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 nearly 5,300 stocks that our 130,000-plus members have rated in Motley Fool CAPS. It's totally free to be a part of the community, and the payback is more than worth it.