5 Stocks Ready to Bounce Back

However hard the market slams a stock, there's always the chance it'll come bouncing right back. We'll consult our Motley Fool CAPS community to find shares on the rebound, examining one specific sector in search of companies with rising CAPS ratings.      

Among the nearly 290 stocks listed under industrial goods in the CAPS screener, we've unearthed a few with the maximum five-star rating. That means our 135,000 CAPS members are confident that these stocks will beat the market in the months ahead. Let's see what members are saying about the five below:

Source: Motley Fool CAPS; Yahoo! Finance.

Even though the average company in the industrial goods sector lost about 31% of its value over the past year, there were still some notable performers, such as China Fire & Security, whose shares are up 50%, and Smith & Wesson (NASDAQ:SWHC), which increased 4% in value. Here's a closer look at why some investors might be optimistic about some of these companies that haven't been highfliers.

Some spring in its step
Crane operator Manitowoc was frozen out last quarter when charges related to selling off its ice business led it to post a loss. Without those charges, and others for restructuring, Manitowoc would have posted a profit that was ahead of analysts' expectations. The crane segment made up the bulk of revenue -- accounting for 86% of sales in 2008 -- but Manitowoc's purchase of Enodis means the little-considered food-service side will become more relevant.

To get regulatory approval for the acquisition, Manitowoc had to sell Enodis' ice business, leaving it with an oven and food preparation line, along with a refrigeration side. While pro forma sales in the food service segment still fell 19% in the quarter, Manitowoc believes it can take market share from competitors like commercial oven maker Middleby (NASDAQ:MIDD). Investors, though, remain focused on the crane business and how the economy affects results.

CAPS member Mikegee52 says investors just have to wait for a recovery.

Manitowoc is a long standing solid company with an excellent reputation. Like most equipment companies it has been hit hard by lack of construction. If you feel construction is due to go or are willing to hold this stock it could be a real winner.

Action for action's sake
Stimulus funding might not help it, so it's probably a good thing that Chicago Bridge & Iron isn't actually in the bridge-building business. Instead, its specialty is engineering, procurement, and construction in the energy industry. If the renewed interest in nuclear energy continues to grow, the company could prosper from it.

Right now, though, it's in a rut, with contract awards down 72% in the latest quarter and backlog declining 44%. Management was quick to point out that it received a new award for $530 million that will be recognized in the third quarter; that alone exceeds the total awards of the second quarter. If global economies recover and energy projects get the green light, Chicago Bridge & Iron just might generate some growth.

CAPS member PebbledShore says there is limited downside to investing in this company.

Was Q2 the bottom? If so, you should own some quality companies like CBI that have been massively oversold due to expectations for worldwide depression. If we have seen the bottom, as CBI's latest earnings seem to indicate, then cyclical stocks like CBI will easily outperform as money comes rushing back in to the market from the sidelines. CBI appears to be in great shape for the rebound, though I worry about the stock taking a hit from possible future impairments to goodwill on the balance sheet.

The ball's in your court
There are many factors that go into whether a stock is a buy or sell, so it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Head over to CAPS today and share your thoughts with other members on whether you think these stocks are ready to bound higher.