Are These Stocks 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 38 stocks listed under aerospace/defense in the CAPS' screener, but we've found more than a few that are well respected with four- and five-star ratings. Those accolades mean our 165,000 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.

Until the market hit the panic button, the broad market averages had staged a pretty bold recovery -- but it's still up 17% over the past year. CAPS drug stocks have fared even better, with average returns around 43% from the year ago period. Of course, helping those market returns were Valley Forge Composite Technologies soaring 700%, BE Aerospace jumping 90%, and Boeing up 64% over the past year. As we see, Smith & Wesson and Taser did nothing to help those returns.

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
It had to be something of a blow to Garmin (Nasdaq: GRMN) to see FLIR Systems step in with a better offer for Raymarine, the maker of maritime display, radar, and autopilot product lines. Garmin is a leader in the aquatic market with over $180 million in sales over the past 12 months while Raymarine had $170 last year. But Garmin was having financial difficulties and it would have niclely bolstered its business.

On the surface it might seem less of a natural fit for FLIR, even if it says it wants to add its thermal imaging technology to Raymarine's fishfinders. Yet Raymarine also manufactures displays, radar, and autopilot products that can make use of FLIR's capabilities. Probably more important to the deal was Raymarine's network of 1,000 dealer outlets and 400-plus marine OEMs.

With 97% of the nearly 500 CAPS members rating FLIR to outperform the broad market averages, it would seem investors think the thermal imaging specialist has the right picture for its business.

Gunfight at OK Corral
After following the same general path at the end of last year, Smith & Wesson Holding and Sturm, Ruger & Co. (NYSE: RGR) have parted ways with the latter rising more than 20% in value compared to the iconic American gunslinger's 30% decline.

Both might need to clear jams, though, if the drop off in NICS background checks is a harbinger of future gun sales. According to the latest FBI statistics, background checks are down less than 1% in May from a year ago, but are off almost 18% since April, a slightly faster rate of decline than in 2009.

Highly rated CAPS All-Star member TSIF expects there to be a rollercoaster ride in S&W's stock, but thinks economic backsliding will have people lining up again to buy guns.

I believe that the mixed news and dependency it has on large police orders, governement orders, (foreign and domestic), and the boost it had to above $7.00 from the fear that the current political administration was going to make it harder to own guns will all settle down somewhat. If we double dip and hit a steep recession then people may buy guns in alstry like fashion to fight off the Zombies.

International markets are smokin'
Earlier this year after Taser's stock soared following announcement of three large orders for its less-than-lethal stun guns, I expressed concerned that it was moving to diversify its business away from its core purpose by getting into text messaging monitoring. While Taser continued its torrid climb, rising to almost $8 a share, they've since suffered a pretty stunning decline, nearly getting halved in the process.

Like the 93% of the CAPS members rating Taser to outperform the market, Ry09 finds the stungun maker's willingness to expand into new areas a positive development.

Taser continues to come up with new innovative products and departments, slowly, will be adding a taser to each officer's belt. Probably one of the most effective tools in law enforcement and that's not going to change.

Why not get a charge out of giving us your opinion on the Taser CAPS page?

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.