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 127 stocks listed under "retail" in the CAPS' screener, but more than a handful of them carry well-respected four- and five-star ratings. Those accolades mean our 170,000 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:


CAPS Rating (out of 5)

Recent Price

52-Week Price Change


5-Year Growth Rate

Costco (Nasdaq: COST) ***** $79.63 37% 13%
SUPERVALU (NYSE: SVU) **** $8.65 (33%) 2%
Walgreen (NYSE: WAG) **** $44.67 51% 14%

Sources: Motley Fool CAPS, Yahoo! Finance.

The markets have been on a roller-coaster ride lately, but with the S&P 500 up 14% over last year it might be surprising to learn the CAPS retail stocks have done only slightly worse, rising only 12% in that same time span. So let's take a closer look at why investors think 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
Now that Leonard Green & Partners has offered to buy BJ's Wholesale Club (NYSE: BJ) for an as-yet-unnamed price, the question of value arises about what it might be worth. On the one hand, Leonard Green also offered earlier this year to buy discount dollar chain 99 Cents Only Stores for almost eight times EBITDA, and it trades at around 16 times forward earnings, slightly more than the 15 times BJ's goes for.

Industry leader Costco, on the other hand, is valued at around 21 times next year's profits and less than 10 times EBITDA. Valuing BJ's closer to Costco would be more appropriate, though not quite so close since its rival's margins are much better across the board.

Certainly the value proposition from a consumer's standpoint can't be beat at Costco. CAPS member latinoeconomist says it has the right combination to remain a winning investment:

It sells high quality goods and services at an unbeatable price. Seems like a good business model to me.

With more than 4,000 members of the investment community weighing in on Costco, it would appears he's got good company, as 96% agree it will beat broad market averages. Don't discount your own opinion. Add it to the others on the Costco CAPS page on whether it's in the express lane for growth.

Not all grocers are green
While a rising tide can lift all boats, it's equally true that the cream rises to the top. So while grocery store chain Kroger (NYSE: KR) is experiencing a robust year of growing sales and earnings, that hasn't necessarily translated into SUPERVALU or Safeway (NYSE: SWY) generating equally good results. In fact, SUPERVALU had some pretty dismal returns over the past year, losing $1.5 billion in 2010.

The struggling grocer is turning around its efforts by expanding its discount Save-a-Lot concept. Save-a-Lot largely features the chain's growing private-label program. Private-label products have been a core component of Kroger's success.

CAPS member scavanna says SUPERVALU is focused on the goal now and should succeed: "Currently [beat] up too much, Dividend aristocrat and management seems refocused."

Let us know your opinion in the comments section below or on the SUPERVALU CAPS page if this stock still has the goods.

A steaming cup of growth
Focusing on your core competencies seems to be a simpler concept to master but one that companies all too often forget. Whether it's the result of empire building or an effort to diversify revenue streams, businesses end up branching out, many times to their detriment.

Walgreen seems to have realized that and it has performed quite admirably over the last 12 months -- the stock is up 51% year over year, outperforming CVS Caremark (NYSE: CVS), which is up less than 17% in the same time frame. Walgreen is putting all its efforts into its main pharmacy business, buying online pharmacy destination this year and recently selling its pharmacy benefit management business for $525 million.

CAPS member mwinvestor isn't so enamored of Walgreen's change and believes it is too expensive. On the other hand, concealedweaponR is going with the notion of investing in what you know best:

im there 24/7 and its where i get my med. recently theyve done some remodeling. the store use to be mainly brick walls now 40% of those walls have been made into windows. this is very smart. why? at night the store is much brighter screaming "hey we are open", and people who normally might [drive] by will pull in.=more sales

Keep an eye on whether Walgreen has the right prescription for growth by adding the stock to the Fool's free portfolio tracker.

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.

The Motley Fool owns shares of Costco Wholesale and SUPERVALU. Motley Fool newsletter services have recommended buying shares of Costco Wholesale and buying calls in SUPERVALU. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here.