3 Stocks Bucking the Downtrend

Even on the market's worst days, buyout news and other short-term forces can send individual stocks up by 10%, 25%, even 50%.

For example, shares in real estate investment trust ProLogis got a 42% Friday of last week when mall developer General Growth Properties (NYSE:GGP) gave the REIT sector a confidence boost by securing a deal to refinance nearly $900 million of debt.

But beyond less-predictable events like that one are stocks with fundamentally compelling reasons for recent momentum. The trick is to find those stocks. That's where Motley Fool CAPS comes in.

The story behind the story
CAPS is no crowd of lemmings. Its best-performing members' opinions do more to shape each company's rating than the picks of their poorer-performing peers. Let's use the collective wisdom of more than 120,000 CAPS members to filter out the noise and find companies offering strong momentum.

We'll use CAPS' handy stock screening tool to quickly zero in on companies with a stock price increase of at least 20% in the past four weeks, a market cap of greater than $100 million, and a beta of less than 3.

Here's a sample of stocks our CAPS screen returned:

Source: Motley Fool CAPS. Price return from Nov. 14 through Dec. 12.

Cemex
Shares in Mexican cement company Cemex have been hammered in the past few months as concerns about a slowdown in construction around the globe and a heavy debt load in a poor economy has many investors spooked. But some investors see a good turnaround candidate in Cemex helped by planned increases in infrastructure spending around the world. With construction related companies like Cemex, McDermott (NYSE:MDR), and Fluor (NYSE:FLR) intimately tied to infrastructure, any increase in building projects that aid the world economy is also good for them.

Investors are holding out hope for the announced Obama stimulus package that could bring significant increase in demand for building materials for roads, bridges, and schools. Nearly a quarter of Cemex's revenue came from the US last year and a stimulus package could give a big boost to US cement consumption.

But some investors are still concerned about the company's $15 billion in long term debt, of which about $6 billion is due by the end of 2009. The company was recently disappointed as they could only refinance a tiny fraction of their short term debt, but currently have five banks working to restructure the amount due next year. Even with the potential for higher debt costs, more than 97% of the 4,325 CAPS members rating Cemex expect it to outperform the market.

Priceline.com
If you believe people are traveling less in a now-official recessionary period, you wouldn't know it by looking at financial results from online travel company Priceline.com. The firm beat analyst expectations in its most recent quarter, making it the 10^th straight quarter to do so. Revenue grew 35% to $561 million, and earnings per share (minus special items) came in at $2.39, up 51% over last year. Priceline.com's gross travel bookings soared 47%, while competitor Expedia (NASDAQ:EXPE) only grew 7%.

Those that are choosing to travel these days have increasingly turned to Priceline to score deals on the company's name-your-own-price service. Also, transport companies like JetBlue that are dependent on fuel have gotten some relief from lower oil prices, and this has translated into some discounts for travelers. So far, this has kept growth alive at Priceline.com, but depending on the severity and length of the recession, business may slow considerably in 2009.

The company itself still takes a cautious tone in describing the current environment and expects earnings to grow at a meager pace this year. But Priceline.com has historically been able to grow free cash flow at a tremendous rate and sits on over $450 million in cash and short term investments today. Despite its strong points though, just shy of 84% of the 650 CAPS members rating Priceline.com are bullish on its chances to outperform the market.

And you?
What's your story? Whether you buy the tale of a stock that's soaring or souring, your own research is more important than collective opinions. But these collective opinions can make your due diligence a whole lot easier.

Add your take on these or any of the nearly 5,400 stocks that our 120,000-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.