5 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 TiVo (NASDAQ:TIVO) shot ahead 53% when it prevailed in a recent patent infringement hearing against DISH Network.

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 135,000 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 30% in the past four weeks, a market cap of greater than $100 million, and a beta of less than 3. Below is a sample of stocks that our screen returned. If you'd like, run this screen yourself -- just keep in mind that results may change as the market does.

Source: Motley Fool CAPS. Price return from May 8 through June 5.

Tata Motors
Tata Motors is facing many of the same pressures as its American and Asian counterparts, like falling demand for its autos as the company finds it increasingly difficult to woo creditworthy buyers to the lot. But Tata noted that the environment has been improving month to month, as car sales in India rose for the third straight month in April, with Tata, Honda, and General Motors all posting higher sales.

Tata Motors just completed the refinancing of a $3 billion bridge loan for the acquisition of Jaguar and Land Rover from Ford, and plans to launch the two brands in India this month. It's also in talks with India's defense department about potentially inking some vehicle contracts to sell Land Rovers.

Many CAPS members are bullish on the potential of its new Tata Nano, which the company claims is the world's cheapest car. It launches in July and already has 200,000 fully paid advanced orders, and some think the line will be a runaway success -- at least in regions that gravitate toward smaller, more efficient cars.

Nearly 97% of the 2,534 CAPS members rating Tata Motors see it standing out from the pack and expect it to outperform the market going forward.

Rite Aid
Stock in Rite Aid has been nearly left for dead by investors as the company is struggling with the hefty debt load it took on in its 2007 acquisition of Brooks Eckerd. The company has closed stores, cut workers, and reduced spending in an attempt to pay off some of its long-term debt, which it relies heavily on to fuel operations. But the stock has seen some new life recently, as a little bit of good news has been coming from the drug store operator.

Similar to Walgreen (NYSE:WAG) and CVS Caremark (NYSE:CVS), Rite Aid got a boost from the Easter holiday, which helped it post higher same-store sales in April, while growing pharmacy sales at core stores helped increase sales in May. It's also gotten a boost recently from a spike in sales of (swine flu) prevention items like hand sanitizers and protective masks, which stores like Rite Aid, Target, and Home Depot have been busy restocking their shelves with.

But despite the flash of positive news, Rite Aid still faces intense competition from its larger, more efficiently run rivals, leaving only a lackluster 87.5% of the 849 CAPS members rating Rite Aid bullish on its chances of beating the broader 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 5,300 stocks that our 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.