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 122 stocks listed under "transportation" 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.

Sources: Motley Fool CAPS, Yahoo! Finance. NA = not available.

The markets have been on a roller-coaster ride lately, but with the S&P 500 up more than25% over last year, it might be surprising to learn the CAPS transportation stocks have done worse, rising just 15% 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
Unlike some other dry bulk operators floundering on the seas of a glut of ships, Excel Maritime may have found a stretch of calm water, as it has locked in time charter rates for its capesize ships.

Ship owners are scrapping capes at a furious rate, because there are too many plying the waters, and it's estimated that as many as 80 such ships are expected to be jettisoned this year, compared with 18 for all of 2010. Excel has secured employment for more than three quarters of its total operating days, with 92% of its capesize fleet locked into time charter employment. The agreements will allow the shipper to largely avoid the volatility of the spot market.

Star Bulk Carriers (Nasdaq: SBLK) recently said it had secured nearly 90% of its capesize fleet's operating days for the year. It's also acquiring two more capes with long-term agreements in place. Analysts are still looking for the overall dry bulk fleet to expand, and Vale (Nasdaq: VALE) is putting to work a huge new vessel called a Chinamax, which has the ability to haul twice the capacity of capesizes.

With almost 2,100 CAPS members weighing in on Excel, 96% of them believe it will outperform the broad market indexes. Let us know on the Excel Maritime CAPS page whether you think this dry bulk carrier is still ship-shape.

No way to run a railroad?
Railroads are back, but as usual Warren Buffett beat everyone to the punch, purchasing Burlington Northern a year and a half ago in a deal that presaged the industry's rebirth. But it hasn't been as if railroad operators were forgotten about on sideyards. They had to invest in large capital projects to improve their rail lines -- raising overpasses on many lines, for example, to accommodate double-stacked trains -- and the price of oil had to rise high enough to make it economically feasible to put railroads ahead of truckers as the preferred mode of transportation.

But where CSX (NYSE: CSX) and Union Pacific (NYSE: UNP) are benefiting from such improving intermodal business metrics, other railways, such as Trinity Industries and Chinese operator Guangshen Railway, have to look elsewhere to find growth.

Trinity saw railcar shipments nearly cut in half in 2010, and while Guangshen saw revneues increase almost 12%, freight transportation accounted for just 10% of total revenues; 60% of the Chinese rail operator's business is from passenger trains. Still, it shipped 68 tons of freight last year, meaning it's no small potatoes here.

All-Star CAPS member BodyByDave thinks China's growth, however much it might come in fits and starts, will serve Guangshen well for years.

With China in the middle of an industrial revolution, its thirst for energy, raw materials, equipment and technology is unquenchable! Many of these materials, equipment, finished products and new employees will require economical transportation. Guangshen Railway is poised to capitalize on this demand for transportation and should create a nice return for shareholders over the next 5 years.

Fortunately for Trinity, it doesn't just rely on railroads for its business, also offering inland barge services, construction products such as asphalt and concrete, and wind turbine towers. That diversity is what has 97% of the 1,067 CAPS member who've rated the company believing that it will still be able to beat the market averages.

Let us know on the Trinity Industries CAPS page whether you think this is a flash in the pan or a stock investors really should check out.

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.