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 160,000-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.

I've used the CAPS screener to filter out $100 million-plus companies that have seen their stock price appreciate by at least 15% in the past 13 weeks, even while they remain at least 45% below their 52-week high.


CAPS Rating
(out of 5)

Price Change

% Below 52-Week High

Western Refining




Governor and Company of The Bank of Ireland (NYSE: IRE)




Ambac Financial (NYSE: ABK)




Source: Motley Fool CAPS. Results from Jan. 29 through April 26.

Despite the huge recent surge in stock of Ambac Financial after the bond insurer reported a surprise fourth-quarter profit, CAPS investors still see a shattered fundamental business behind the one-star stock. But investors haven't written all financial firms off, and many find that there are fundamentally compelling reasons to consider the higher-rated Bank of Ireland.

The bottom case
Even with the global financial situation still showing its ugly side, investors see several reasons why Bank of Ireland may be looking nowhere but up today. Despite the lingering pressures on the Irish bank, many investors still see growth potential as it recently unveiled plans to raise additional capital while keeping the government as a minority shareholder, which some believe will put the bank in a better position than peers that have received heavier government support. The move is expected to boost its tier 1 capital ratio, and the first part of its capital raising has already seen strong demand.                               

And while peer Allied Irish Banks has taken a different tack, with plans to sell off its U.K. business and a stake in M&T Bank (NYSE: MTB) in the U.S. to meet government-sanctioned capital requirements, Bank of Ireland plans to strengthen its brand in the U.K. by launching a fully incorporated U.K. subsidiary, potentially attracting more customer deposits.

Or further to fall?
Yet even though Bank of Ireland is showing more promise these days, it continues to book losses, and it expects the continued downward pressure in its core markets to be a drag on net interest margin this year. 

When investors stack this outlook up against U.S. banks, it's easy to see why some still shy away from European firms -- even the now much-maligned Goldman Sachs (NYSE: GS) was able to churn out $3.29 billion in first-quarter earnings, and US Bancorp (NYSE: USB) dished out a strong quarterly profit as well. The Irish government still has a strong hand in stabilizing its banking system, and both Greece and Portugal have recently received Standard & Poor's ratings downgrades as well. The ongoing pan-European financial woes could significantly blunt a recovery of Bank of Ireland or others, like National Bank of Greece (NYSE: NBG), which was recently part of a whole group of Greek banks to be downgraded by Moody's.

And government ownership in Bank of Ireland -- even if it remains a minority -- could sap earnings power, not unlike what happened with AIG (NYSE: AIG). One analyst recently downgraded the fallen insurer, saying that any earnings growth would likely go toward paying the U.S. government as a preferred shareholder, rather than common shareholders. In the end, many investors concede that government assistance likely won't come free.

What's your call?
Still, 93% of the 761 CAPS members rating Bank of Ireland are bullish, and they see it outperforming the broader market. Count me as a bear though -- with so many macroeconomic events still unfolding, I'm staying sidelined.

Ultimately, your own opinion counts most; CAPS is just there to help you form it. Happily, the Motley Fool CAPS database is all free, and you're invited to add your own insight on any of the 5,400 stocks that our 160,000-plus members have covered.

The Motley Fool Stock Advisor service looks for companies with strong management poised to beat the market over the long haul. To see all the stocks that have helped Tom and David Gardner beat the market by 62 points on average, take a free 30-day trial.

Since getting some new sneakers, Fool contributor Dave Mock is showing a little more spring in his step, too. He owns no shares of companies mentioned here. The Fool's disclosure policy sometimes gets wound too tight and needs a deep-tissue massage.