3 Stocks Springing Back

With all the volatility in the markets today, there's no shortage of market seers attempting to call a bottom. Man of the Year Ben Bernanke called a bottom not once, but twice. Heck, even Keanu Reeves laid out what a world-ending market bottom looks like.

Investors should consider buying stocks after a big decline, when pessimism has unduly beaten good companies down to great prices. That's why we here at the Fool -- and 150,000-plus investors like us -- look to the Motley Fool CAPS community to help sniff out the real opportunities from languishing companies driven by speculation.

A real bottom or another leg down?
Of course, there's no foolproof method for timing a market bottom. But CAPS has a great balance of both quantitative and qualitative resources available on 5,400 stocks, and even a nifty stock screening tool to help investors quickly zero in on potential investment opportunities. Once we've rounded up our candidates, we can use all the information in CAPS to test whether each company has already hit bottom or simply primed shareholders for further pain.

I've used the CAPS screener to filter out $100 million-plus companies that have seen their stock price appreciate by at least 20% in the past 13 weeks even while they remain at least 40% below their 52-week high.

Source: Motley Fool CAPS. Results from Nov. 13 through Feb. 12.

The bottom case
There are several reasons why many investors believe ReneSola may be looking nowhere but up today. The company's transformation into a vertically integrated solar player, helped by a couple of its acquisitions, is putting the company in a good position to gain business, and many investors believe the future holds plenty of promise. So far, that's holding true -- it recently scored its first major solar module contract to supply 600 megawatts of modules to a major global solar company over three years, in contrast to the struggles that other players in the sector have been experiencing lately.

The strength of the contract and ReneSola's improving fundamentals in its wafer business sparked an upgrade from a Piper Jaffray analyst, and many CAPS members agree, rating ReneSola five stars. With other uplifting events in the solar sector, like Chinese peer JA Solar's (NASDAQ:JASO) strong fourth-quarter results and SunPower's (NASDAQ:SPWRA) move to buy SunRay, investors like the improving outlook and even see potential for the company to take market share in China and other parts of the world.

Or dead cat in disguise?
Even though ReneSola looks to be in a solid position, not all investors are beaming as recent news from the solar sector still leaves plenty of doubt. Quarterly results coming from U.S. companies like Evergreen Solar (NASDAQ:ESLR), Energy Conversion Devices (NASDAQ:ENER), and MEMC Electronic Materials (NYSE:WFR) have been weak. And although ReneSola has seen a pickup in activity, its fourth-quarter earnings aren't expected to be home runs, with a loss projected for the quarter based on Wall Street estimates. 

The company's move to acquire Dynamic Green Energy recently hit a wall when the company couldn't gain government approval in China, putting an end to a purchase that was expected to help further the company's reshaping. And to top it off, the looming threat of shrinking European subsidies has many in the industry seeing potentially another round of pricing pressure across the solar industry.

What's your call?
Overall, about 97% of the 1,027 CAPS members rating ReneSola are bullish and see it outperforming the broader market. For my part, I'm hesitant to jump into a sector that is wagged so strongly by government decisions on subsidies, particularly during a period when many nations are focused on their own debt troubles.

But what ultimately counts is your own opinion; CAPS is just there to help you form it. The best part is that the Motley Fool CAPS database is all free, and you can even add your own insight on any of the 5,400 stocks that our 150,000-plus members have covered.