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 specialty vehicle maker Oshkosh jumped more than 26% last Wednesday when the company scored a $1 billion contract with the Pentagon to build MRAP vehicles for troops in Afghanistan.  

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 135,000 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 20% 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 June 5 through July 2.

Metalico
Scrap metal recycler Metalico has more than doubled in value over the past several months, yet still sports a cheaper price-to-book ratio than steel producer Nucor (NYSE:NUE) or auto salvage specialist Copart. And despite a goodwill writedown in the fourth quarter of last year knocking 12-month trailing earnings into negative territory, it's generated more than $65 million in free cash flow over the last 12 months, benefiting from metal demand as the mining and refining markets are contracting in the face of the bleak economy.

U.S. steelmakers have seen some increased activity recently, although some industry executives from companies like U.S. Steel and Nucor have differing views on whether that will continue. But Commercial Metals' (NYSE:CMC) CEO recently gave a positive outlook for scrap metal recyclers, citing a potential increase in domestic demand and higher ferrous scrap prices. And some analysts think the "cash for clunkers" program could increase turnover of old cars significantly, giving a slight boost to companies like Metalico or Schnitzer Steel. Overall, 97% of the 1,186 CAPS members rating Metalico are optimistic on its future and expect its stock to outperform the market.

Evergreen Solar
Evergreen got an 11% boost on Thursday as a JPMorgan analyst upgraded the stock, citing the smooth operation of its Devens facility that could help it to meet the next demand upturn in solar. Some CAPS members think its new facility in Wuhan (China) will determine much of the company's future success, as it should help the company significantly improve production costs.

Evergreen Solar recently tapped the capital markets for $72.5 million, with some of the money set to help fund the China facility with a preliminary capacity of 100 megawatts. And it expects that the contracted use of Chinese firm Jiawei Solar, which has done work for Evergreen and SunPower (NASDAQ:SPWRA) before, will be a key factor in driving down cost to remain competitive with fast-moving peers. At this point, 92% of the 2,048 CAPS members rating Evergreen Solar are bullish and see it outperforming the broader market.

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 5,300 stocks that our 135,000-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.