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 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 20% in the past 13 weeks even while they remain at least 30% below their 52-week high.

Source: Motley Fool CAPS. Results from Feb. 5 through May 4.

Investors have been more willing to buy into Novavax recently as the company has been making progress in clinical trials with its flu vaccine. And while shares of Rexahn Pharmaceuticals have been swinging wildly as the market digests mixed messages from results of a mid-stage trial of Serdaxin, the recent share movements in these stocks have done little to move CAPS members collective opinion on these clinical stage biopharmaceutical companies, which still sit at a lowly one-star rating each. On the flip side, plenty of members think Excel Maritime Carriers may be seeing a legitimate move higher.             

The bottom case
With a five-star rating in CAPS, members see several reasons why Excel Maritime Carriers may be looking nowhere but up today. A number of investors believe the stock is trading at a big discount relative to its book value, which could help drive the stock higher, especially if a recovery of the dry bulk sector gets under way. Dry bulk shipping rates have recently seen some renewed strength, which -- if the trend continues -- bodes well for Excel Maritime and Genco Shipping & Trading (NYSE: GNK) that have high exposure to the spot market. Genco has started strong out of the gate, having booked multiple new time charters in the first quarter, helping to bring about two-thirds of its fleet's available days under contract for this year. And one Oppenheimer analyst sees potential further upside in day rates when Chinese iron ore contracts become finalized, leading to increased imports into China and a possible boost to the entire dry bulk sector.

Or further to fall?
Even though Excel Maritime Carriers shows a glass half full to many investors, the looming issue of overcapacity in the dry bulk sector remains a threat to a robust recovery. Paragon Shipping (NYSE: PRGN) is committed to adding four new builds spread across 2011 and 2012, with options for four more in 2012 as well. Navios Maritime (NYSE: NM) recently added a Capesize vessel to its fleet and agreed to acquire another one. With many investors and analysts long showing concern about a shipping supply glut, the announcements of more ships in play is not encouraging to many who still see demand uncertainty. Some investors also remain concerned over the heavy debt loads of Excel and others like Dryships (Nasdaq: DRYS), which had nearly $3 billion at the end of last year and recently visited the debt markets for more. While Excel's debt is smaller than Dryships', it still dwarfs its market cap. And with some of these lingering issues adding more uncertainty, some investors see better options in other companies.

What's your call?
Overall, 96% of the 1,925 CAPS members rating Excel Maritime Carriers are bullish and see it outperforming the broader market. For my part, it takes an awful lot to overlook heavy debt loads, so I tend to prefer cleaner balance sheets backing up a stock.

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 160,000-plus members have covered.