Even on the market's worst days, headlines and ticker feeds tout soaring stocks. Some juicy rumor or biotech wonder drug seems to be reason enough for a stock to climb 10%, 25%, even 50% -- sometimes in a single day. Sometimes, the companies are familiar, but many are names and stories entirely unknown to investors.
Often, news of a buyout offer sends a stock rocketing. For instance, SAP's
Luckily, there's help right at your fingertips. Motley Fool CAPS is a great tool not only for finding and screening stocks, but also for getting a quick read on the fundamental stories behind them.
The story behind the story
Let's dig right in, using the collective wisdom of more than 65,000 CAPS investors, to look past the splashy news and find companies showing strong recent momentum.
We'll screen for stocks showing at least 30% price appreciation in the past month. Then we'll weed out stocks with less than a $100 million market capitalization, and those with a beta greater than 3. Setting these limits will help keep us out of the wild, pump-and-dump land of penny stocks.
Here, then, is a sampling of stocks that our screen returned today.
|
Company |
CAPS Rating (Out of Five): |
Price Change Last Month: |
|---|---|---|
|
China Mobile |
***** |
33.7% |
|
Companhia Vale do Rio Doce |
***** |
35.2% |
|
Hansen Natural |
**** |
35.5% |
|
China Life Insurance |
**** |
37.3% |
|
Baidu.com |
*** |
54.6% |
Now let's sift further through this list of market-thumping stocks, and find out why they've performed so well over the past month.
The method behind the madness
CAPS contains a searchable record of investors' opinions and comments about a company, as well as an overall ranking from the investing community. Lest you think this sounds like following a crowd of lemmings, note that the opinions of the best-performing investors are weighed more heavily than those from poorer-performing investors. Thus, a company's ranking is influenced more strongly by investors who have already proved themselves better than the average dart-throwing monkey.
Keeping up with the Joneses
One of the market's best stocks, specialty soda and drink maker Hansen Natural, is now almost a household name. But the party isn't over yet. Shares are hitting new highs, thanks to recent gains partly fueled by increased earnings estimates from Goldman Sachs analyst Andrew Sawyer. The early success of the company's Java Monster brand of energy-coffee drink has increased Sawyer's optimism regarding additional growth at Hansen.
Shares in smaller Hansen peer Jones Soda have been bubbling as well -- up 36% in the past month. But rather than hitting new highs, Jones Soda is rebounding from a fall triggered by the firm's second-quarter earnings miss. That recent bounce has given Jones Soda an outlandish valuation of 136 times current earnings. Even Hansen sits at a current P/E of 58, alarming some CAPS investors, who question the company's valuation. Still, you'll find 952 out of 1,055 CAPS investors overlooking Hansen's pricey shares, and voting for the company to beat the S&P going forward.
China's fortune told
The party in China hasn't stopped, either. This week's list contains big gains from wireless carrier China Mobile, Internet search star Baidu.com and insurer China Life. Checking CAPS opinions on Baidu.com, however, turns up frequent uses of the words "bubble" and "hysteria." With the rapid gains in many Chinese stocks surpassing fundamental reasoning, more than a few CAPS players and Fools are suggesting that investors forget China and look for opportunity elsewhere.
What's your story?
Ultimately, the only story that counts is your own. Whether you buy the story of a soaring or souring stock, your own research is more important than collective opinions. But thankfully, these collective opinions make individual due diligence much easier.
So step right up and chime in with your own take on these or any of the more than 5,000 stocks covered in Motley Fool CAPS. It's totally free to be a part of this story, and the payback is more than worth it.
