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 On2 Technologies (AMEX:ONT) jumped by 49% after an announcement that Google will purchase the video-compression specialist in an all-stock deal. 

But beyond the less-predictable events lie the 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 do 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 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 the results may change as the market does.

Source: Motley Fool CAPS. Price return from July 17 through Aug. 14.

Taseko Mines
A strengthening copper price and aggressive efforts to control costs have helped Canadian miner Taseko Mines grow its operating margins on a month-by-month basis since the beginning of this year. The company also increased its earnings to $11.4 million in the second quarter, compared with $3.5 million in the first, as its Gibraltar mine saw huge copper production increases in the second quarter.

And Taseko's copper reserves aren't the only thing that has investors excited lately. Many also see an opportunity with the gold it's sitting on in its Prosperity project, a gem that might make the company a tasty acquisition. The company also recently put some cash to work and purchased $17.5 million of its convertible bonds from bondholders to eliminate some potential dilution of shares that it anticipated would take place. Taken together, the positive momentum has won over many fans, including 98% of the 1,331 CAPS members who rate it. They see Taseko Mines to outperforming the market.

Foster Wheeler
Despite seeing both revenue and profit fall significantly, Foster Wheeler impressed Wall Street with second-quarter results showing that business was not nearly as bad as expected. The company said pressure in the engineering and construction business is more pronounced this year, and it shares earnings pressures similar to those that competitors Fluor (NYSE:FLR) and McDermott International (NYSE:MDR) are seeing. But the company noted that it has numerous clients who plan to move on projects, and it also expects demand for power-plant units to rise in the second half of the year.

The tight credit markets and the recession have hampered large construction projects, but Foster has been winning contracts abroad. It pushed its backlog 10% higher to $1.98 billion and grew gross margin by a couple of percentage points amid cost-cutting efforts. The company consistently produces positive operating cash flow, and many CAPS members like its well-managed finances, combined with favorable macroeconomic trends for global infrastructure services in the long term. Today, nearly 98% of the 1,778 CAPS members rating Foster Wheeler expect it to outperform 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.