These Stocks Are Bouncing Back

However hard the market slams a stock, there's always the chance it'll come bouncing right back. We'll consult our Motley Fool CAPS community to find shares on the rebound, examining one specific sector of the economy in search of companies with rising CAPS ratings.         

There are 101 stocks listed under food & beverage in the CAPS' screener, but we've unearthed more than a few with four- and five-star ratings. Those accolades mean our 160,000 CAPS members are confident that these stocks will beat the market in the months ahead, but let's see what members are saying about the ones below:

Source: Motley Fool CAPS; Yahoo! Finance.

Despite the market hitting the panic button, the broad market averages have staged a pretty bold recovery -- up 28.6% over the past 52 weeks. But CAPS food & beverage stocks have done even better, with the average company up 48.7% over the same period. Of course, those returns include some strong performances from the likes of juice maker Jamba, which more than tripled, and Chinese corn seed producer Origin Agritech, which jumped nearly 150% in value.

So let's take a closer look at why investors think that some of these other companies won't be jumping from the frying pan into the fire now that the market has fallen from its lofty heights.

Some spring in its step
Looking at AgFeed Industries' stock performance, you can't say the Chinese pig farmer has been living in hog heaven. When China slammed the door closed on its pork market to Smithfield Foods (NYSE: SFD) and Tyson (NYSE: TSN) as swine flu frenzy rose to a fever pitch, you would have thought AgFeed and Zhongpin (Nasdaq: HOGS) would benefit.

But hog prices tumbled last summer and didn't stage a rally till the end of last year. Now that the markets have been reopened for U.S. pork processors, we'll probably see Smithfield and Hormel Foods (NYSE: HRL) squealing with delight. The CAPS community thinks AgFeed will be as happy as a pig in, um, mud, too.

All-Star member CowboyCal says that trying to catch AgFeed's stock will be as difficult as grabbing a greased pig:

AgFeed is the leading hog producer in China which has a larger hog market than America. They have plans for expanded hog farms. The price for pork is cyclical and currently is low, but with a rise in the price of pork, AgFeed should follow. They have excellent financials and show signs of a solid small-cap with huge potential growth.

No wonder it's growing
Weak pricing also has been a concern for Archer Daniels Midland, the second largest ethanol producer in the U.S. as margins continue to slide. It's putting its hopes in the EPA following through on raising ethanol levels in gasoline to 15%, but there's no firm timetable in place.

Better for ADM is the likelihood of another bumper corn crop possible this year. Farmers have already planted 68% of their corn this season, well ahead of the typical 40% pace, so the corn processor is looking at a lot more business this year, and it may come sooner than usual.

CAPS member tonymagoo is looking at Archer Daniels Midland to rebound as a result of the industry's resurgence:

Food processing is going through a renewal of its approaches to the marketplace. ADM is ready for the NEW world of food and biodiesel as much as anyone else. Profits are up and future looks bright.

Taking aim at growth
There's no denying that Coca-Cola is an international brand powerhouse, basically able to deliver a new drink product anywhere in the world through its muscular distribution network. Yet that just might work against it these days as the financial crisis in Greece threatens to drag down all European economies with it, plunging the euro to its lowest levels since 2008.

As CAPS member hybridinvestor suggests, translating all of Coke's international sales back into dollars is going to cost it mightily:

General pan on all big U.S. multi-nationals due to simply (1) they have all run-up lately to about fairly valued, (2) a strengthening dollar will be a headwind for repatriated profits, and (3) I think there could be continued rotation to more economically sensitive issues as folks see a sustained recovery.

The ball's in your court
There are many factors that go into whether a stock is a buy or sell, so it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made all from a stock's CAPS page. Head over to CAPS today and share your thoughts with other investor analysts on whether you think these stocks are ready to bound higher.