With all the volatility in the markets today, there's no shortage of market seers attempting to call a bottom. Man of the Year Ben Bernanke called a bottom not once, but twice, though some still argue that the worst is yet to come.

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 investment opportunities.

I've used the CAPS screener to filter out $100 million-plus companies that have seen their stock price appreciate by at least 15% in the past 13 weeks even while they remain at least 25% below their 52-week high.


CAPS Rating
(out of 5)

Price Change

% Below 52-Week High

W&T Offshore (NYSE: WTI)




MELA Sciences (Nasdaq: MELA)








Source: Motley Fool CAPS. Results from March 26 through June 21.

Shares of MELA Sciences got a boost recently after the company said an FDA panel will review its MelaFind melanoma detection device in August and make a recommendation that will be weighed in a forthcoming FDA decision. While investors place their bets on a possible approval that could lead to a big revenue stream, five-star W&T Offshore is already cranking out profits.

The bottom case
Investors see several reasons why W&T Offshore may be looking nowhere but up today. Higher realized oil prices have boosted results for independents like Apache (NYSE: APA) and Mariner Energy (NYSE: ME) -- which both reported huge increases in earnings -- as well as much larger integrated majors like Chevron (NYSE: CVX), which posted its biggest profit increase in a decade for the first quarter. The results from W&T Offshore in recent quarters have pleased many CAPS members, too, and the stock has stayed at a five-star rating for most of the past year. It followed a profitable fourth quarter that also contained big revenue growth with another profitable period in the first quarter, with revenue climbing 44%.

While Apache has recently been beefing up its presence in the Gulf of Mexico with an acquisition of Devon Energy's (NYSE: DVN) unwanted shelf properties and a merger agreement with Mariner, W&T has been making some moves of its own. It recently completed the acquisition of some offshore blocks from Total SA (NYSE: TOT) and said it was very optimistic about the second quarter because of the increased M&A activity and higher average realized oil prices. 

Or further to fall?
Even though W&T Offshore has some strong wind in its sails, having operations focused in the Gulf of Mexico adds uncertainty to the stock due to the Deepwater Horizon spill. Although W&T is more focused on the Gulf of Mexico conventional shelf, with limited deepwater assets, shares took a hit after the spill began in April, and the overhang of potentially more regulation has some investors discounting domestic producers. A judge's decision to overturn the six-month moratorium on new deepwater oil and gas drilling on Tuesday potentially brings some potential relief to the industry, and some investors may see opportunity in cheaper shares of oil players. But a significant debt load on W&T's books turns off some investors and sends many looking for plays with more conservative balance sheets.      

What's your call?
Overall, about 97% of the 887 CAPS members rating W&T Offshore are bullish and see it outperforming the broader market. I have to agree that there are better bargains out there in the oil and gas sector.

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.

The Motley Fool Stock Advisor service looks for companies with strong management poised to beat the market over the long haul. To see all the stocks that have helped Tom and David Gardner beat the market by 60 points on average, take a free 30-day trial.

Since getting some new sneakers, Fool contributor Dave Mock is showing a little more spring in his step too. He owns no shares of companies mentioned here. W&T Offshore is a Hidden Gems pick. Total S.A. is an Income Investor recommendation. The Fool owns shares of Devon Energy and MELA Sciences. The Fool's disclosure policy sometimes gets wound too tight and needs a deep-tissue massage.