You're never going to catch them all.

It doesn't matter whether you're a Golden Glove outfielder, a flu-seeking hypochondriac, or a growth-stock investor. The same mantra applies: You can't catch everything.

I'm just giving you fair warning, because you're about to kick yourself. I'm about to give you the names of five stocks that have more then doubled since bottoming out last year.

You missed most of them, probably. Heck, I missed them all.

Bear with me, though. I'm going to go over why they bounced back, and teach you how to catch the next ground-rule doubles before they come at you.

Five for the road
Volatility breeds opportunity, turning ordinary stocks into winners. Let's review a motley crew of companies that have seen their shares more than double in recent months.


Recent Price

Recent Low



$2.64 on 11/21/08

CV Therapeutics (NASDAQ:CVTX)


$7.06 on 11/21/08

D.R. Horton (NYSE:DHI)


$3.79 on 11/21/08

Brinker International (NYSE:EAT)


$3.88 on 11/21/08

Great Wolf Resorts (NASDAQ:WOLF)


$0.61 on 12/10/08

CV Therapeutics is a biotech company whose FDA approvals are going so well that it blew off a $1 billion buyout offer. GigaMedia is cashing in on the growth of online gaming. D.R. Horton is a homebuilder, at a time when few people seem to want new homes. Brinker owns the Chili's casual-dining chain. Great Wolf operates family resorts with massive indoor water parks.

All these companies took different paths to double off their lows -- and not all of their fundamentals have bounced back. Biotechs are still feast or famine. Comps at Chili's are unlikely to turn around in the near future. Travel is still dicey business, no matter how appealing the lodge's water slide may be.

However, all five stocks happen to have bottomed around the same time. Within a pair of trading days in late November (and one in December), pessimism peaked in all of these companies. There's an important lesson right there. Wasn't it Rudyard Kipling who wrote about the importance of keeping your head when everyone else is losing their own?

Tennis balls vs. eggs
But these five stocks weren't the only freefalling equities -- both THQ (NASDAQ:THQI) and RealNetworks (NASDAQ:RNWK) continued to plunge, hitting fresh 52-week lows yesterday. In times of calamity, it's vital to know the difference between the stocks that bounce back and those that don't.

Why did the first five double while the latter two didn't? While three months is a very short time period to draw any firm conclusions, one colorful market analogy may help illustrate the point. A tennis ball will bounce back after it smacks the ground. An egg, unfortunately, will only crack. The key to finding the next wave of easy doubles -- and you know that wave will come, because it always does -- is to separate the tennis balls from the eggs.

These five factors could help you find companies that will bounce back from the next market bottom:

  • Pay attention to brands that matter. As bad as things may get in casual dining, it's hard to imagine Chili's going away.
  • Keep an eye on the future catalysts. Many investors stay away from young biotechs like CV Therapeutics because they aren't proven, yet analysts are already expecting CV to turn a profit next year.
  • Spot companies riding the early trends. Great Wolf is a niche leader in entertaining resorts that offer self-contained attractions. These days, even hotel giant Holiday Inn is following suit on a smaller scale.
  • Battered sectors often have the best turnaround opportunities. There's a major shakeout taking place among residential real estate developers. With fewer players like D.R. Horton left standing, the survivors will enjoy greater market share when things bounce back.
  • Don't be afraid of international opportunities. Instead of shying away from a company like GigaMedia because it is Taiwanese, embrace it -- along with its chunky margins and growing profits -- as a growth stock that few domestic investors know about. 

Now, I'm not entirely giving up on THQ or RealNetworks. THQ is a video game publisher in one of the few retail categories showing strength these days. RealNetworks is still blessed with a cash-rich balance sheet. However, Brinker bounced back because no one feared that Chili's would go out of business, despite the countrywide slump. Given the iffy global economy, Gigamedia may seem like a novel way for online gamblers to make some money. CV Therapeutics may not have heard the last of its hungry suitor.

Isn't that where you want to be?

They're Breakers, but they're not breaking
Two of the five doublers -- Gigamedia and CV Therapeutics -- are recommendations in the Motley Fool Rule Breakers newsletter service. I'm proud to be an analyst for this growth-stock research service. Among the things we like to see in our picks: strong brands, promising new technologies, wide market opportunities, and innovative business strategies -- qualities that the five doublers exhibited.

Did we nail the bottom? No. However, we didn't bail on them when November rolled around. The potential was there, and obviously, it still is.

You can see what other stocks the Rule Breakers team likes today, along with our full research for each pick, free for 30 days -- simply click here.

Whether you join me and my fellow analysts or roll up your sleeves and strike out on your own, just remember to separate the tennis balls from the eggs. You're never going to catch them all -- but don't you dare stop trying.

Longtime Fool contributor Rick Munarriz would rather hit a homer than a ground-rule double, but ultimately, rounding the bases matters most. He does not own shares in any of the stocks in this story. CV Therapeutics and GigaMedia are Motley Fool Rule Breakers recommendations. GigaMedia is also a Global Gains selection. The Fool has a disclosure policy.