With all the volatility in the markets today, there's no shortage of seers trying to call a bottom. Fed Chairman Ben Bernanke called a bottom not once, but twice. Heck, even excellent actor Keanu Reeves laid out what a world-ending market bottom looks like.

And investors should be buying near the bottom, especially when pessimism has unduly beat good companies down to great prices. That's why we here at the Fool -- and 135,000 investors like us -- look to the Motley Fool CAPS community to help sniff out the real opportunities from languishing companies driven by speculation.

Real bottom or another leg down?
Of course, there's no foolproof method of knowing whether any stock, or even the general market, has bottomed. But CAPS has a great balance of both quantitative and qualitative resources, and even a nifty stock screening tool to not only identify opportunities but also determine whether a company has already reached its bottom valuation or has just primed shareholders for further pain.

I've used the CAPS screener to find $100-million-plus companies whose stocks have appreciated by at least 20% in the past 13 weeks, even while remaining at least 50% below 52-week highs. These stocks also have a positive return on equity and earnings per share over the past 12 months; this limits the results to companies that have a history of delivering results regardless of stock gyrations. If you'd like, run this screen yourself -- just keep in mind that results may change as the market does.


CAPS Rating
(out of 5)

Price Change

% Below 52-Week High





AgFeed Industries (NASDAQ:FEED)




A-Power Energy Generation Systems (NASDAQ:APWR)




Paragon Shipping (NASDAQ:PRGN)




Wynn Resorts (NASDAQ:WYNN)




Source: Motley Fool CAPS. Price change from May 1 through July 31.

The bottom case
There are several reasons why Mechel OAO may have better days ahead, but most prominent with investors are the macro fundamentals surrounding the long-term demand for steel. Many CAPS members anticipate rising steel and metals prices as emerging markets like China and India continue to build infrastructure. There are also signs that demand is on the upswing: Mechel recently increased some of its coal mining output because of new sales contracts. Companies like Nucor (NYSE:NUE) and ArcelorMittal (NYSE:MT) are also showing signs of optimism. Russian steel companies are also getting a boost from Prime Minister Vladimir Putin, who recently pledged to stimulate domestic metal demand and offset protectionism in other countries to help local steelmakers boost exports. Conditions inside the company are more positive as well -- Mechel successfully refinanced some of its short-term debt, and a Russian ratings agency recently gave it a strong credit rating.

Or dead cat in disguise?
Even though Mechel has shown impressive management of a volatile market lately, the company remains one of Russia's most heavily indebted steel companies, with $5.8 billion on the books at the end of the first quarter. It addressed its short-term debt concerns through refinancing -- which brought the company back from the edge -- but it's possible that debt issues could resurface. Lack of demand caused Mechel to swing to a loss in the first quarter, with revenue nearly cut in half from the previous year, and how the company does will depend a lot on whether the global economy recovers in the near future. Some CAPS members see short-term pain in Russia and think the stock may have shot up too fast. After all, the stock has already more than quadrupled from its low this year, so many investors think there's better value elsewhere.      

What's your call?
Overall, 97% of the 1,656 CAPS members rating Mechel are bullish, picking it to outperform the broader market. I see this steel stock -- and many others -- carrying too-high expectations for an economy that isn't out of the woods yet. But what ultimately counts is your own opinion -- CAPS is just there to help you form it. The best part is that the Motley Fool CAPS database is all free, and you can even add your own insight on any of the 5,300 stocks that our 135,000-plus members have covered.

The Motley Fool Stock Advisor service looks for companies with strong management poised to beat the market over the long haul. To see all the stocks that have helped Tom and David Gardner beat the market by 42 points on average, take a free 30-day trial.

Since getting some new sneakers, Fool contributor Dave Mock is showing a little more spring in his step, too. He doesn't own shares of companies mentioned here.The Fool's disclosure policy sometimes gets wound too tight and needs a deep-tissue massage.