5 Stocks Breaking Out

Volatile markets seem to be the norm these days, as stocks gyrate through ups and downs on a daily basis. But sometimes buyout news and other short-term forces can send individual stocks soaring by 10%, 25%, even 50% -- even on the market's worst days.        

For example, shares of National Bank of Greece (NYSE:NBG) jumped nearly 25% one day last week on hopes that Greece would get help from Germany and the rest of the European Union with its debt problems.

But beyond less-predictable events like that one are stocks with fundamentally compelling reasons behind a big move. 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. Here's an example of how we can use the collective wisdom of more than 150,000 CAPS members to filter out the noise and find companies with strong potential.

We'll use CAPS' handy stock screening tool to quickly zero in on companies with a stock price increase of at least 20% in the past four weeks, a market cap of greater than $100 million, and a beta of less than 3. Then we can use the insight of the CAPS investment community to add some context to these market movers.

Source: Motley Fool CAPS. Price return from Jan. 15 through Feb. 12.

Netflix
While Blockbuster's (NYSE:BBI) shares have been following a downward trajectory for years, Netflix has been breaking out to reach all-time highs. The company's DVD rental and streaming movie service continues to reel in customers, with the company adding a record amount of subscribers in the fourth quarter. As strong demand has helped others like Coinstar (NASDAQ:CSTR) project future growth, Netflix looks to continue adding customers this year as well.  

The growth of Netflix's streaming media has once again sparked buyout rumors, and the recent run-up in price has some investors holding back on valuation concerns. But the company's ongoing growth potential has many CAPS members bullish on Netflix as it expands the presence of its streaming service on devices like gaming consoles, televisions, and PCs, and is intimating that it will dip its toe in international markets. 

The stock holds a three-star rating in CAPS today, with 84% of the 7,339 members rating Netflix expecting it to outperform the broader market.

Ciena
Optical networking equipment maker Ciena and Ericsson are among the companies that chose to grab a piece of bankrupt Nortel, and many investors like the growth potential that the purchase of the optical networking and Ethernet assets offers Ciena. It's expected to significantly boost the size of Ciena's operations and revenue, and increase its competitive stance in the communications equipment market that others like Infinera, Alcatel-Lucent (NYSE:ALU), and Cisco Systems compete in. The stock recently received a mix of upgrades and a downgrade from Wall Street analysts, with mixed views on its recent price increase and the integration of Nortel's business. Like Neflix, Ciena's CAPS rating has been jostling between two and three stars for the past year, but each has a core following that is bullish on its long-term prospects. 

In Ciena's case, 87% of the 510 CAPS members rating the company expect it to beat the market average performance.   

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 5,400 stocks that our 150,000-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.