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 CyberSource jumped 32% last Wednesday when Visa agreed to buy the electronic-payment security services provider for $2 billion in an attempt to catch up with online transaction leader PayPal.        

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 160,000 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 30% 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 March 26 through April 23.

Stillwater Mining
Like many other commodities, prices for platinum group metals (PGM) had a strong recovery in 2009. With PGM miner Stillwater Mining's restructuring of operations at its East Boulder Mine and increased production at several others, it's been recovering nicely after the steep drop in demand during the recession, and management expects the improvement to continue. Stillwater faces the expiration of its supply agreement with Ford (NYSE: F) at the end of this year, which protected it with floor prices, but the company expects improved efficiency and a strong cash position to help buffet it from palladium price swings. Along with rising PGM prices, auto sales have picked up momentum lately, helping Stillwater Mining and peer North American Palladium (NYSE: PAL) both reach 52-week highs recently. Like Stillwater Mining, North American Palladium is also calling for continued strength in palladium prices. As such, 91% of the 491 CAPS members rating Stillwater Mining expect it to outperform the market.

STEC
STEC's weak guidance had disappointed investors earlier this year, but shares of the solid state drive maker have reversed course recently. Strong earnings coupled with a positive outlook from Intel (Nasdaq: INTC) and a huge quarterly showing from Western Digital (NYSE: WDC) have helped lift the data storage sector. Some CAPS members are taking a more bullish view on the company as improvements in corporate spending are now becoming evident. Overall, 91% of the 768 CAPS members rating STEC see it as a market-beating investment.

Huntington Bancshares
Huntington Bancshares has joined several other big banks in recently topping analysts' quarterly profit (or loss) expectations. Adjusting out a significant tax benefit, the bank posted a narrower loss, and when the benefit is included, Huntington swung to a one-cent per-share profit. It still had rising non-performing assets, but reduced its provision for loan losses in the first quarter and expects to be profitable in 2010. Prior to the recent jump, a growing sentiment in CAPS bumped Huntington Bancshares' rating from two to three stars, and now 75% of the 599 CAPS members rating Huntington Bancshares see it beating the S&P. 

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 160,000-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.