Can These Stocks Bounce Higher?

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 111 stocks listed under "media" in the CAPS' screener, and more than a handful of them carry well-respected four- and five-star ratings. Those accolades signal our 170,000 CAPS members' confidence that these stocks will beat the market in the months ahead. Let's see what members are saying about the ones below:

Source: Motley Fool CAPS; Yahoo! Finance.

The markets may be feeling better about the economy, now that a few reports have offset much of the drumbeat of negativism we've seen. But even with the S&P 500 up 12% over last year, CAPS media stocks have done twice as well. The average stock here is up more than 23% from the year-ago period.

Helping the sector's performance was ne'er-do-well Sirius XM Satellite Radio (Nasdaq: SIRI), up 175% in value, and one of radio's largest networks, Westwood One, which more than doubled year over year.

Of course, in addition to DreamWorks' ailing returns, there were companies like Chinese media outfit VisionChina Media (Nasdaq: VISN), whose shares fell 65% over the past 12 months. 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
While the FCC is poised to approve cable operator Comcast's merger with General Electric's NBC Universal, it will reportedly impose a raft of conditions on the union to limit its impact on consumers. For example, it's anticipated that Comcast will have to allow rivals access to NBC's programming.

Even without those regulations, CAPS member cbwang888 thinks Comcast can't keep up with the pace of technology:

Two mega trends that will kick cable guys' butts:

- 4G wireless network

- Internet TV / Media player Netflix

Let us know on the Comcast CAPS page whether you'll be tuning in to this media behemoth, should the regulators allow its creation.

Coloring between the lines
The celluloid dreams of DreamWorks Animation were a bit of a nightmare recently, as features from Disney (NYSE: DIS) and Time Warner (NYSE: TWX) -- Tangled and Harry Potter, respectively -- disrupted Megamind ticket sales. While the Shrek franchise is also underperforming, DreamWorks still has a pipeline worth noting, along with enviable profit margins.

In some ways, these studios are like biotechs that need to constantly replenish their pipeline to maintain momentum. But with sequels to its hits How to Train Your Dragon and Kung Fu Panda on the way, DreamWorks seems capable of bouncing back. The drubbing its stock has taken suggests that this is an opportune time to buy in at a discount.

CAPS member gdett2 agrees that it's only time before DreamWorks gets noticed again. You can follow along by adding DreamWorks Animation to the Fool's free portfolio tracker, and see how long it takes before the animation studio's a marquee name again.

It all adds up
Traditional advertising may be about to venture off into the digital stream. According to a Financial Times article, New York ad agency Omnicom will be partnering with Google, Facebook, and other online media. Typically, ad agencies have chosen to buy up digital media, but Omnicom eschews that avenue for a more tactical approach.

Will that leave the company lagging rivals such as WPP or Publicis? While 88% of CAPS members rating the ad agency see it outperforming the broad market averages, the opinion that Omnicom is pursuing the right strategy is nearly unanimous among All-Stars and Wall Street analysts following the company.

You can advertise your opinion on the Omnicom CAPS page, and add it to your watchlist to keep on top of its progress.

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.