5 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 of General Growth Properties fell nearly 50% in a day last week on reports that executives were unloading shares.

Big drops in share price can sometimes signal material defects or new risks. But at other times, they're simply pullbacks after a long run-up. 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 115,000 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 30% in the last four weeks, and which have a market cap 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 Sept. 5 through Oct. 3.

First Solar
Alternative energy seems to have disappeared from the lexicon of news anchors and presidential candidates these days as the economy takes center stage. Getting tossed out along with the green discussion is stock in First Solar and peers such as Evergreen Solar and Canadian Solar (NASDAQ:CSIQ). Nervous investors still question the likelihood of countries continuing generous tax incentives for those who install solar systems which will cut growth.

Of the 3,253 members rating First Solar in CAPS, the ratio of those bullish sits just shy of 75%. More troubling though is the nearly 59% of All-Star members that disagree and give First Solar the thumbs down.

Alcoa
Slowing demand in aerospace and auto sectors has dropped aluminum producer Alcoa's third quarter net income from $555 million last year to only $268 million this time. Falling demand also has the company cutting back major capital projects. Even speculation that Vale (NYSE:RIO) might take advantage of Alcoa's lowered share price hasn't been warmly received by the market.

Investors still like Alcoa's consistent dividend yield though, which it has paid without interruption since 1939. With the lower share price, Alcoa currently yields 3.8%, and 92% of the 1,675 CAPS members rating the company expect it to beat the market.

Halliburton
Oilfield services provider Halliburton noted that Hurricanes Gustav and Ike have damaged facilities and interrupted operations that will cut into the company's third quarter profits. But while crude oil prices continue to crumble, Foolish oil guru David Lee Smith thinks the market may be overreacting, as OPEC still has the ability to curb production.

While the U.S. and Europe will likely see slowing economies, emerging nations will continue to drive demand for oil. Halliburton's strong international presence also helps, giving 95% of the 2,729 members rating Halliburton reason to be bullish.

Freeport-McMoRan
As part of the commodity club, stock in metals miner Freeport has mirrored plummeting materials prices and is down nearly 70% from its May high. But some CAPS members like the long-term outlook as the leading miner has first class technology and strong management. The low valuation and strong balance sheet also has many viewing the company as a great value play, as more than 97% of the 4,410 CAPS members rating Freeport-McMoRan expect it to outperform the market.

Satyam Computer Services
Not long ago, I pointed out that Indian IT services firm Satyam has been highlighted by the CAPS community as one of India's top stocks. Since then, shares have fallen almost 40% further as investors grow increasingly concerned that more failing U.S. financial institutions means less business for Satyam. The company continues to see opportunity though as it struck a new partnership with Oracle and may even be on the prowl for acquisitions. CAPS members rating the company haven't lost much faith either -- 98% of them still see Satyam beating the market.

Ultimately, whether or not you believe a fall in any stock is warranted, your own research is more important than collective opinions. CAPS can help you quickly focus your due diligence, and even point out potential pitfalls you may not have seen.

Add your take on these or any of the 5,400 stocks that 115,000-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.

On Oct. 7, 2008, Fool co-founder David Gardner and his Motley Fool Pro team invested $1 million in a portfolio designed to help you make money in any market. In the coming weeks, the team, relying heavily on proprietary CAPS "community intelligence" data, will establish long and short positions in a broad range of securities, including common stocks, publicly traded put and call options, and exchange-traded funds (ETFs). To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.