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 Excel Maritime Carriers (NYSE:EXM) jumped more than 20% last Tuesday, after the Baltic Dry Index spiked following several days of declines.

But beyond less predictable events like that one are stocks with fundamentally compelling reasons for recent momentum. The trick lies in finding them. 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 19 through July 17.

Looking flashy
SanDisk has been in the red since it fell to a loss in the second quarter of 2008, and analysts expect even more red ink in the flash memory specialist's latest earnings. Still, shares recently got a bump after a Lazard Capital Markets analyst said the company finished its second quarter strongly, with potential gains in market share. As companies like Google (NASDAQ:GOOG) aim to work their way into the netbook market, SanDisk hopes to capitalize on the potential growth in sales of tiny computers with its netbook removable flash memory cards and a line of solid-state drives.

Farther up the product chain, the company's Sansa music player now holds the No. 2 spot behind Apple's (NYSE:AAPL) iPod, and ahead of other products like Microsoft's (NYSE:MSFT) Zune. While Apple still dominates, the Sansa's position will help buffer it from Microsoft's latest threat. It's even helped SanDisk gain recognition and demand for its patents, and for flash memory in mobile devices. The company also finally secured a patent deal with Samsung, guaranteeing a portion of the latter company's flash memory production output. At this point, more than 92% of the 1,724 CAPS members rating SanDisk expect the company to outperform the market.

Not so, Medifast
Medifast's shares have been rocking the market, rising several times over in recent months. Even multiple allegations from financial fraud detection agency the Fraud Discovery Institute haven't been able to slow the company's rise. In February, the FDI said Medifast was a pyramid scheme; more recently, it accused Medifast's outside accounting firm of a conflict of interest.

In spite of the accusations (which the company has denied), Medifast pulled in strong profits in the first quarter. It was helped by strong revenue and a growing team of "coaches" -- salespeople selling its diet products -- which expanded from 2,200 to 4,000 members over the past year. Buoyed by these healthy operations, the company plans to open more weight-loss facilities in Texas and Florida this year.

Investors still aren’t certain whether Medifast's business model can truly bring in profits, though. A comparably weak 83% of the 165 CAPS members rating Medifast expect it to beat the market going forward.

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.