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 169 stocks listed under telecommunications 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:

Company

CAPS Rating Today
(out of 5)

Recent Price

52-Week
Price Change

Est. 5-Year Growth Rate

Powerwave Technologies (Nasdaq: PWAV)

*****

$2.42

48%

13%

Telestone Technologies (Nasdaq: TSTC)

****

$5.12

109%

15%

CenturyLink (NYSE: CTL)

*****

$6.87

18%

18%

Source: Motley Fool CAPS; Yahoo! Finance.

The markets may be feeling better about the economy after a few reports have offset the drumbeat of negativism we've seen, but with the S&P 500 up 10% over last year, CAPS telecommunications stocks performed slightly better. The average stock is up 12.5% from the year-ago period. Of course, helping those returns were performances like those by Telestone Technologies above and IDT, which jumped more than 500%.

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 markets are roiled again.

Some spring in its step
According to the market researchers at iSuppli, wireless network operators are ready to start spending more on their infrastructure again after two years of spending less. Capital spending in 2011 is poised to rise by $40 billion, a near 7% increase over 2009's levels, and will keep right on spending through 2014.

That's good news for network solutions providers like Powerwave Technologies and Telestone. Even though their stocks have performed admirably over the past year, there have been periods of splotchy performance as supply chain constraints in the global electronics industry resulted in delayed shipments. This past quarter saw the same problems, and although there was a 26% increase in sales, it missed analyst expectations because of them.

Powerwave's biggest customer, Nokia Siemens Network, representing 25% of total revenues this quarter, says its turnaround is gaining traction and points to its $7 billion contract to build a network for LightSquared as evidence. It also purchased the wireless infrastructure assets of Motorola (NYSE: MOT). But with Nokia (NYSE: NOK) and Siemens reportedly wanting to bail on their joint venture (and NSN has said it has received unsolicited interest from private equity investors to take a stake), these remain challenging times.

The CAPS community is riding the wave on Powerwave, however, with 91% of the members rating the wireless communications networking hardware company to outperform the broad market averages. You can dial in to what's happening on the Powerwave Technologies CAPS page.

Driving a bargain
When the marriage of CenturyLink and Qwest Communications (NYSE: Q) is consummated, one of the largest landline operators in the country with more than $20 billion in revenues, 17 million phone lines, and 5 million broadband connections operating in 37 states will be created. But that doesn't mean it will have a clear signal for growth.

The high short interest in the two companies suggests investors are concerned that Tier 1 carriers Verizon and AT&T (NYSE: T) will continue to eat away at their landline business through a combination of voice, wireless, and broadband service. VoIP remains a concern and Google's (Nasdaq: GOOG) free domestic call Internet-based phone service could chew up even more business.

But by joining together, though, CenturyLink and Qwest are giving themselves more heft to compete against the inroads being made. Highly rated CAPS All-Star member JPDemers likes the growth by acquisition strategy CenturyLink is undertaking: "Secure and steady income, a fat dividend, and continued growth via acquisitions. What's not to like, especially in a down market?"

Apparently the broader CAPS community does, too, as 93% of the CAPS members rating the telecom believe it will outperform the market. Add your opinion on the CenturyLink CAPS page on whether you think the shorts have this one right.

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.

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True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. 

Fool contributor Rich Duprey doesn't have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.