Volatile markets seem to be the norm, as stocks gyrate through ups and downs on a daily basis. But sometimes buyout news and other short-term forces can send individual stocks up by 10%, 25%, even 50% -- even on the market's worst days.
For example, shares of Javelin Pharmaceuticals rose 58% last Monday after Hospira said it planned to complete its previously delayed tender offer for Javelin by June 30.
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 165,000 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 15% 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.
|
Company |
CAPS Rating
|
4-Week |
|---|---|---|
|
US Gold Corp (AMEX: UXG) |
*** |
23.1% |
|
Banco Santander (NYSE: STD) |
*** |
22.4% |
|
Banco Bilbao Vizcaya Argentaria (NYSE: BBVA) |
*** |
17.9% |
Source: Motley Fool CAPS. Price return from June 4 through July 2.
US Gold Corp
In the second quarter, the price of gold rose the most it has in a quarter in more than two years, and silver finished with its sixth straight quarterly gain. So investors are still seeking refuge in defensive investments amid lingering concerns over the global economy. The soaring gold price prompted Deutsche Bank to recently upgrade major miner Barrick Gold (NYSE: ABX), which rid itself of its hedges last year, but CAPS members have mixed views on US Gold Corp. Despite the fact that one of US Gold Corp's projects sits next to Barrick's flush Cortez mine in Nevada, some wonder whether the prospects there and in Mexico can support the higher shares of the exploration-stage company. Still, 93% of the 598 CAPS members rating US Gold Corp expect it to beat the broader market.
Spanish banks
While the financial stability of Spain and other European countries has been the intense focus of investors and economists lately, there were recent rumors that Banco Santander and Banco Bilbao Vizcaya Argentaria may be two of the strongest of the major European banks when "stress test" results are finally published by the European Union. And Portugal and Spain recently completed debt offerings, adding some investor confidence in the Spanish banks.
In a struggling European economy, Banco Santander has surprised some by taking an aggressive line with some recent asset purchases rather than just hunkering down. It's buying out Bank of America's (NYSE: BAC) minority stake in its own Santander Mexico, which is expected to yield a large gain for Bank of America, and an affiliate is picking up a $3.2 billion auto loan portfolio from Citigroup (NYSE: C) to further the U.S. banks' goal of freeing up more capital. Banco Santander is also leading the hunt ahead of Banco Bilbao Vizcaya Argentaria and others for 318 U.K. branches of Royal Bank of Scotland (NYSE: RBS) and may even be eyeing the purchase of a U.S. bank. Many CAPS members like the added diversification and opportunities in global assets, but some investors remain cautious about the ongoing troubles in the region. Overall, nearly 94% of the 753 CAPS members rating Banco Santander expect it to outperform the broader market, while 89% of the 220 CAPS members rating Banco Bilbao Vizcaya Argentaria hold a similar bullish stance.
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 165,000-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.
