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 159 stocks listed under industrial 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; it's still up 16% over the past year. CAPS industrial stocks have fared even better, with average returns around 38% from the year-ago period. Of course, helping those returns were China Yuchai's (NYSE: CYD) soaring almost 150% and Westport Innovations' (Nasdaq: WPRT) doubling in value over the past year.

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
The numbers that have been pouring out of economists and analysts seem to show what we've feared all along: We're stumbling toward a double-dip recession. Jobs creation is anemic; unemployment is stubborn; manufacturing -- though still in expansion mode -- is stalling; housing is dead; commercial real estate is only just approaching the danger zone; and the one catalyst everyone was hoping would lead us out, China, is in the middle of bursting its own bubbles in housing and natural resources. Its economic growth is now seen stagnating, too.

While ultimately bleak, this too shall pass. Companies that invest now for the eventual turn will be those that capture the lion's share of the rewards later. Caterpillar looks like it's willing to make the necessary investments. As CAPS member EmmyKaye says, "Dig we must for a greater world," and the heavy equipment manufacturer is expanding its excavator production capacity in China in preparation for that country's planned improvements to its infrastructure.

lovingbend523 says Cat is reaping the rewards of that country's stimulus spending, even if business here at home has been slack.

[Caterpillar] stands to gain on the dollar for exports, it still has not seen the full impact of the stimulus plans here but mainly in China.

Financing for construction equipment remains tight, according to a survey by McGraw-Hill, and certainly a customer of Bucyrus International getting turned down by the Export-Import Bank for loan guarantees to buy coal mining equipment because the project wasn't "green" enough is emblematic of the situation, but also pretty disturbing, too. Only after political arm-twisting did Ex-Im agree to reconsider.

Secure in the knowledge
The multifaceted Tyco International was able to beat analyst expectations last quarter, but there are a lot of moving parts to consider. It has its finger in the pies of ADT alarm systems, fire and safety protection, flow control, and electrical and metal parts. The latter is now being considered for a spinoff, much as Tyco did with its health-care unit, Covidien,, as it focuses more intently on the security sector. That's underscored by its acquisition of Brink's Home Security.

With 91% of the more than 500 CAPS members who rated Tyco marking it to outperform the market, there's a feel of security that the conglomerate can excel. Secure your own opinion at the Tyco International CAPS page.

International markets are smokin'
Investors in Zoltek need to hope Vestas Wind Systems can secure a few more orders like the one it recently notched for 139 turbines for a wind farm in Colorado. Zoltek is increasingly dependent on Vestas for revenues -- it accounted for 54% in 2009, up from 40% the year before -- and management's prediction the second half of 2010 would be strong could only buoy the stock so long after its recent earnings whiff.

Vestas did earn a rare win in China, where domestic suppliers Sinovel and A-Power Energy Generation Systems (Nasdaq: APWR) seem to be favored. Western wind turbine makers have seen their share of the Chinese market drop from 71% in 2005 down to just 14% last year.

CAPS All-Star rofgile is looking to strong gusts from the U.S. market to ultimately power Zoltek's rise.

Wind power in the US will begin expanding again in 2010. The writing is on the wall with both the Cape and Texas now in a race to be the first offshore wind. 

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.