3 Stocks in a Tailspin

Individual stocks can surge 10%, 25%, or even higher in a short period of time. And they can fall just as far, just as quickly.

For example, shares in clothing maker Quiksilver dropped nearly 20% on Tuesday, after the company offered a weak near-term outlook and took on expensive financing expected to burden it with high interest payments.

Big drops in share price can sometimes signal material defects or new risks. But at other times, they're simply pullbacks, part of the larger pessimism facing the market today. Fortunately, we have Motley Fool CAPS, a great resource to help us understand the larger picture behind big price drops.

Is the sky falling?
CAPS contains more than just the crowd's opinions. Its best-performing members' votes count more in shaping each company's rating than do the picks of their poorer-performing peers. That way, investors can intelligently use the collective wisdom of more than 135,000 CAPS members to make better decisions.

We'll use CAPS' handy stock screening tool to quickly zero in on companies that have been slashed by at least 15% in the last four weeks, and which have a market cap greater than $100 million and a beta of less than 3. If you want to run this screen for yourself, please do -- just keep in mind that the results will update with the market.

Source: Motley Fool CAPS. Price return May 15 through June 9.

VeriSign
A federal appeals court recently spurned a lower court's recommendation to dismiss an antitrust lawsuit against VeriSign, regarding the company's pricing of Internet domain names and its control of domain-name registries. The company has had a lucrative contract to run the directories that keep track of the Internet's domain names, with the ability to raise annual fees. With domain-name-registry revenue making up a huge portion of VeriSign's top line, some investors are concerned about the length of time that the suit will now drag on, and the effect it may have on the company's pricing power in the negotiation of future contracts. In CAPS, a lukewarm 84.4% of the 262 members rating VeriSign expect it to outperform the market.

Hansen Natural
Hansen has recently expanded into new international markets with significant distribution deals. Most notably, it's forged a partnership with Coca-Cola Enterprises (NYSE:CCE), one of the bottlers and distributors of Coca-Cola (NYSE:KO) products, to sell Hansen's Monster energy drinks in Europe. It also has deals in place with Wal-Mart Stores, Costco (NASDAQ:COST), and major grocery chains to sell its products.

Despite the recession, Hansen bucked the trend. The company posted strong year-over-year net sales growth of 15% in the first quarter, reaching $244 million, and continued that growth in April.

But not all is sunshine and roses in the land of energy drinks. Hansen shares have been trending down in the past month, and they took a big hit when the company reported disappointing sales in May. Analysts also see increasing competition in coffee drinks weighing on the company's Java Monster drinks, which make up a significant portion of its sales. At this point, 92.2% of the 1,819 CAPS members rating Hansen Natural believe it will beat the broader market.

Western Refining
Like Tesoro (NYSE:TSO) and Sunoco, Western Refining swung to a profit in its most recent quarter, recovering from year-ago losses. But like other independent refiners, the company recently said it expects pressure on margins and increased crude costs in the second quarter. It increased the initial size of its planned offering to 20 million shares and $200 million in convertible notes, taking advantage of market conditions -- as many other companies have -- with a dilutive share offering. Despite the near-term pessimism, 94% of the 753 CAPS members rating Western Refining expect it to outperform the S&P going forward.

Ultimately, whether or not you believe a fall in any stock is warranted, your own research is more important than collective opinions. CAPS can help you quickly focus your due diligence, and even point out potential pitfalls you may not have seen.

Add your take on these or any of the 5,300 stocks that 135,000-plus members have covered in Motley Fool CAPS. It's totally free to be a part of the community, and the payback is more than worth it.