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 Marvel Entertainment (NYSE:MVL) made a superhero leap of 25% after Disney said it would buy the company for $4 billion in cash and stock.

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 140,000 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; results may change as the market does.

Source: Motley Fool CAPS; price return Aug. 7-Sept. 4.

Hunting for new growth
Huntsman and other chemical makers, like OM Group (NYSE:OMG), posted quarterly sales declines recently, as their key markets were affected by the recession. But on the "good news" front, Huntsman reported volume improvement over the first quarter, early signs of recovery in some sectors of Europe and North America, and an improving Asian business.

Apollo Management's failed acquisition of Huntsman last year has brought some settlement money Huntsman's way, which gave the company a hefty one-time gain in the second quarter, and it recently announced a plan to put capital to work in a bid to buy the assets of bankrupt Tronox. If Huntsman can close the deal, it would become the second-largest titanium dioxide producer, behind DuPont.

Despite concerns about the level of debt, many CAPS members like the strong dividend that Huntsman pays as well as the high insider ownership of the company. The company's chief executive, Peter Huntsman, notes that he -- like many of his investors -- is happy to see the company acquiring and growing rather than selling and shrinking.

Nearly 96% of the 485 CAPS members rating Huntsman expect it to outperform the broader market.

The new smart
Smart-grid technology company Echelon has picked up a couple of fresh contracts recently, sending investors scurrying for shares upon each announcement. One is a long-term deal to supply electric utility Duke Energy (NYSE:DUK) with its smart meters, which help monitor household electricity use. The initial order is for $15.8 million and could reach up to $150 million. It also scored a smaller contract with the largest utility in Finland, expecting to bring in $50 million to $60 million from the deal.

The Duke deal comes at a time when the Obama administration has been talking up the benefits and efficiencies of smart-grid technology. With at least $4.5 billion in stimulus funding available from the Energy Department, the technology has certainly been getting more attention from investors lately.

In CAPS, 92% of the 235 members rating Echelon believe it will beat 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 140,000-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.