3 Stocks in a Tailspin

Individual stocks can surge 10%, 25%, or even higher in a short period of time. And they can fall just as far, just as quickly. For example, shares of mortgage insurer Radian Group fell 20% Tuesday when the company reported its fourth straight quarterly loss, making investors wonder again if the risk in the stock is worth its current price.   

Big drops in share price can sometimes signal material defects or new risks. But at other times, they're simply pullbacks along with the larger pessimism facing the market. Fortunately, we have Motley Fool CAPS, a great resource to help us understand the larger picture behind big price drops.

Is the sky falling?
CAPS contains more than just the crowd's opinions. Its best-performing members' votes count more in shaping each company's rating than do the picks of their poorer-performing peers. That way, investors can intelligently use the collective wisdom of more than 165,000 CAPS members to make better decisions.

We'll use CAPS' handy stock screening tool to quickly zero in on companies with three factors: Their prices have fallen at least 15% in the past four weeks, and they have a market cap greater than $100 million and a beta of less than 3.

Source: Motley Fool CAPS. Price return June 9 through Aug. 3.

Vistaprint
While competitor Office Depot (NYSE: ODP) has been struggling with lower sales in its most recent quarter, Vistaprint pulled in 22% higher sales than last year's fiscal fourth quarter and managed an impressive 30% increase for the full year. But shares of the small-business products provider took a steep dive last week as its fourth-quarter earnings fell 21% and its guidance disappointed Wall Street. The company has been expanding operations overseas, but the cost of growth has eaten into earnings, and a few CAPS members question its ability to grow earnings. In CAPS, a lukewarm 78% of the 308 members rating Vistaprint expect it to beat the broader market.

(Click here to read why Motley Fool analyst Andy Louis-Charles has selected Vistaprint as today's 11 O'Clock Stock buy opportunity.)

Comtech Telecommunications
Military communications technology provider Comtech Telecommunications saw its fiscal-third-quarter revenue and profit soar as it gained more business from the U.S. government. While other defense companies such as Lockheed Martin (NYSE: LMT) and Northrop Grumman (NYSE: NOC) have been looking to keep a lid on costs because of concerns about slow spending in the U.S., Comtech has been bullish on increased government spending for its products. But shares were hammered after it recently announced that the U.S. Army chose another company for a big contract for about half the price of Comtech's bid. One Wall Street analyst warns the stock may fall further, but a few CAPS members gave a bullish opinion following the drop. 

Overall, 94% of the 251 CAPS members rating Comtech Telecommunications remain bullish on its chances to outpace the S&P.         

Jinpan International
Instead of the 10%-15% revenue growth that Jinpan had forecast for 2010 previously, the electric infrastructure components maker switched up its outlook recently and now sees a 10%-15% drop in revenue with earnings plummeting by as much as half this year. The company cited delayed orders and stiff competition as reasons for the shortfall, and the bad news sent the stock deeper down into the value bin. But many CAPS members are optimistic on the long-term potential of the stock as China continues to build out its infrastructure, and peers like ABB (NYSE: ABB) have seen increasing orders in the country. 

CAPS members remain overwhelmingly bullish on Jinpan International, with 98% of the 1,263 members rating the company expecting it to outperform the broader market averages.

Ultimately, whether you believe a fall in any stock is warranted, your own research is more important than collective opinions. CAPS can help you quickly focus your due diligence, and even point out potential pitfalls in investments that you may not have seen.

You can also add your take on these or any of the 5,400 stocks that 165,000-plus members have covered in Motley Fool CAPS, or even add your two cents directly to this column in the comments box below.