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 Star Scientific met an end many had expected, falling 73% Wednesday after losing a patent dispute with tobacco giant RJ Reynolds.

Big drops in share price can signal material defects or new risks. But sometimes the pullbacks are simply 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 22 through June 16.

MBIA
Similar to another troubled bond insurer, Ambac Financial (NYSE:ABK), MBIA has closed its doors to new business, and has been scrambling to maintain the solvency of the company. While the firm was once a cash-making machine, it's been involved in several lawsuits over the past several months. Most recently, it was sued by a group of 18 banks, including Bank of America and JPMorgan Chase (NYSE:JPM), over its split into two businesses to insulate its toxic assets. The credit rating of its structured finance business was cut to non-investment grade, leaving holders of policies written by the unit concerned about MBIA's ability to pay out claims.

As such, only half of the 991 CAPS members rating MBIA believe that its stock will outperform the market.

Melco Crown Entertainment
According to analysis by China-based casino operator Galaxy Entertainment, gambling revenue at all of the casinos in Macau was down 12.8% in the first quarter. Macau casino owner Melco saw its first-quarter revenue drop 55% compared to a year ago, while hitting an $0.08-per-share loss. But even with the slowdown in gambling, U.S. companies like Wynn Resorts and Las Vegas Sands (NYSE:LVS) see big opportunity in Macau.

Melco has bet big on its $2.1 billion City of Dreams development in Macau, which could return it great sums of money or give it a new level of losses. Aptly, the company's CEO calls the recent opening a "turning point" for the company, and its success or failure will have a significant impact on gaming in Macau overall.

Many CAPS members see the new resort as a boon for business, and nearly 96% of the 1,145 members rating Melco Crown Entertainment expect the stock to beat the market.

Coeur d'Alene Mines
Standard & Poor's Ratings Service recently questioned Coeur d'Alene Mines' liquidity position, suggesting that additional external funding may be needed for its plans in capital spending. But the company's CEO anticipates it will generate enough cash from operations to cover investments.

The company controls one of the largest silver mines in the world and expects to produce 20 million ounces of silver this year, nearly twice the expected output of competitor Hecla Mining (NYSE:HL). The Idaho mining company recently shocked a few investors when it completed a reverse stock split of 10-for-1, a move that brought its share price out of penny-stock territory.

While reverse splits often spell death for a company, many investors remain bullish, with 95% of the 1,222 CAPS members rating Coeur d'Alene Mines expecting it to outperform the broader market.

Ultimately, whether or not you believe a fall in any stock is warranted, your own research is more important than collective opinions. Smart investors use CAPS to help quickly focus due diligence and perhaps uncover pitfalls. 

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.