3 Stocks Springing Back

With all the volatility in the markets today, there's no shortage of market seers trying to call a bottom. Man of the Year Ben Bernanke called a bottom not once, but twice. Heck, even Keanu Reeves laid out what a world-ending market bottom looks like.

Investors should consider buying stocks after a big decline, when pessimism has unduly beaten good companies down to great prices. That's why we here at the Fool -- and 165,000-plus investors like us -- look to the Motley Fool CAPS community to help sniff out the real opportunities from languishing companies driven by speculation.

A real bottom or another leg down?
Of course, there's no foolproof method for timing a market bottom. But CAPS has a great balance of both quantitative and qualitative resources available on 5,400 stocks, and even a nifty stock-screening tool to help investors quickly zero in on potential opportunities.

I've used the CAPS screener to filter out $100 million-plus companies whose stock price has appreciated by at least 15% in the past 13 weeks even while staying at least 30% below the 52-week high.

Source: Motley Fool CAPS. Results from Feb. 26 through May 28.

Callon Petroleum has benefited from higher realized oil prices compared with last year, but the company could feel the impact from changing regulations in the Gulf of Mexico, where it operates some of its assets. And while Celldex Therapeutics is rated lower than Callon at only two stars, the company is involved in the growing field of immunotherapies, with a long list of drug candidates that could bring significant value to the stock.    

Making the case
It may be a risky play, but many investors see several reasons why Celldex Therapeutics may be looking nowhere but up. The biopharmaceutical company has big potential packed in its pipeline -- which it expanded with the recent acquisition of CuraGen -- as well as agreements with other companies. Celldex recently scored a $3 million sublicense payment from partner TopoTarget after TopoTarget landed a deal with Spectrum Pharmaceuticals (Nasdaq: SPPI) for promising anti-cancer drug Belinostat.

The company has also been making progress with its brain cancer drug candidate CDX-110 with partner Pfizer (NYSE: PFE). Celldex will provide more information about the drug's interim results at the American Society of Clinical Oncology (ASCO) meeting this month;  immunotherapy drugs like Bristol-Myers Squibb's (NYSE: BMY) melanoma candidate ipilimumab are also expected to be a hot topic. When Dendreon's (Nasdaq: DNDN) Provenge recently became the first cancer immunotherapy approved in the U.S., some analysts believed it was a big benefit for other drugs like CDX-110 and Oncothyreon's (Nasdaq: ONTY) and Merck KGaA's Stimuvax in the emerging field.

Or further to fall?
Even though Celldex Therapeutics has plenty of opportunities, there are still plenty of catalysts likely to have a significant impact on the stock -- either good or bad. The company recently released preliminary data on its brain cancer candidate, then a negative analyst comment on the data sent shares down even though many other analysts disagreed with the interpretation. The more detailed explanation of data at the ASCO meeting might mean more volatility for investors. Like many other development-stage companies, shares have been very volatile because Celldex is still early in the development of many of its therapies, and analysts seem to agree that the company will stay in the red for the foreseeable future. Seeing potential downward pressure, enough top-performing CAPS members have been leaning toward the bearish side to keep the rating at two stars.  

What's your call?
Overall, 88% of the 148 CAPS members rating Celldex Therapeutics see it outperforming the broader market. For my part, I tend to avoid development-stage biotech players purely because I lack the knowledge -- and stomach -- to justify the risk of investment.

But what ultimately counts is your own opinion; CAPS is just there to help you form it. The best part is that the Motley Fool CAPS database is all free, and you can even add your own insight on any of the 5,400 stocks that our 165,000-plus members have covered.