Individual stocks can rise 10%, 25%, or even higher in a short period of time. And they can fall just as far, just as quickly. For example, shares of SunPower
Big drops in share price can sometimes signal material defects or new risks. But at other times, they're simply pullbacks along with the larger pessimism facing the market today. Fortunately, we have Motley Fool CAPS, a great resource to help us understand the larger picture behind big price drops.
Is the sky falling?
CAPS offers more than just the crowd's opinions. Its best-performing members' votes count more in shaping each company's rating than do the picks of their poorer-performing peers. That way, investors can intelligently use the collective wisdom of more than 140,000 CAPS members to make better decisions.
We'll use CAPS' handy stock screening tool to quickly zero in on companies whose stock price is down at least 20% in the past four weeks, and that have a market cap greater than $100 million and a beta of less than 3. If you want to run this screen for yourself, please do -- just keep in mind that the results will update with the market.
Company |
CAPS Rating
|
4-Week |
---|---|---|
Apollo Group |
** |
(23.8%) |
Coinstar |
** |
(20%) |
Whole Foods Market |
*** |
(20.1%) |
Source: Motley Fool CAPS. Price return Oct. 23 through Nov. 17.
Apollo Group
Education company Apollo Group followed a strong third quarter with another quarter of rising enrollment for its degree programs, turning in revenue and earnings that beat expectations in its fourth quarter. Apollo and others like DeVry have benefited from increased enrollment from the recession. But a Securities and Exchange Commission inquiry into the revenue recognition practices of Apollo Group overshadowed its positive results and slammed its shares in late October. The news brought several analyst downgrades of the stock, and whether the SEC finds wrongdoing or not, some CAPS members are concerned about the distraction and other consequences of the investigation. At this point, only 84% of the 795 CAPS members rating Apollo Group expect it to outperform the market.
Coinstar
Coinstar's third-quarter revenue came in 45% higher than last year's numbers, but shares have headed lower as revenue fell short of analyst expectations and the company lowered its full-year revenue outlook. The company bought out the remaining ownership interest in Redbox from McDonald's
Whole Foods
High-end grocer Whole Foods recently said it believes its sales have stabilized and turned a corner after the recession put pressure on consumers to shop for cheaper food. But that view contrasted with the cautious outlook it recently gave that didn't satisfy Wall Street's expectations. Some investors remain bullish on the company's brand and leadership, but a significant group is concerned about rising competition. Whole Foods is having to adjust to the new environment by making strategic price adjustments to stay competitive with discount prices at stores like Costco
Ultimately, whether or not you believe a fall in any stock is warranted, your own research is more important than collective opinions. CAPS can help you quickly focus your due diligence, and even point out potential pitfalls you may not have seen.
Add your take on these or any of the 5,300 stocks that 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.