3 Stocks Springing Back

With all the volatility in the markets today, there's no shortage of market seers trying to call a bottom. Man of the Year Ben Bernanke called a bottom not once, but twice. Heck, even Keanu Reeves laid out what a world-ending market bottom looks like.

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 160,000-plus investors like us -- look to the Motley Fool CAPS community to help distinguish 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 opportunities. Once we've rounded up our candidates, we can use all the information in CAPS to test whether each company has already hit bottom or simply primed shareholders for further pain.

I've used the CAPS screener to filter out $100 million-plus companies whose stock price has appreciated by at least 20% in the past 13 weeks even while they remain at least 35% below their 52-week high.

Source: Motley Fool CAPS. Results from Jan. 8 through April 5.

The bottom case
The promise of slick, miniature image projectors has been around for a long time, but many investors see several reasons why the time has come for the technology and believe that stock in laser projector maker Microvision may be going nowhere but up. The company is making progress toward sustainable revenue, and some CAPS members think that the orders it received in recent quarters from original equipment manufacturers and distribution customers validates its generation technologies and paves the way for growth. Two of its first customers have returned for new orders, and the market quickly bid shares higher when Microvision recently announced an $8.5 million order from a consumer electronics customer that represents more than twice its 2009 revenue.

Microvision recently began selling its SHOWWX portable pico projector that hooks up to a number of portable devices, similar to other projectors from companies like Dell (Nasdaq: DELL) and Sony (NYSE: SNE). It's about the size of an Apple iPhone and even sports a "Made for iPod" certification. And the company has high hopes to eventually see pico projectors widely embedded in cell phones and other devices like tablets. That could prove to be a big market for Microvision -- and its competitors as well -- if the technology catches on.

Or dead cat in disguise?
Even though Microvision seems to be on the cusp of a breakthrough in technology, some investors think that any substantial earnings are still a ways out. Microvision has tried earnestly to crack the display market for years, working with companies like Motorola (NYSE: MOT) to develop its technologies, and is still churning out losses. It reported another loss and falling revenue for its fourth quarter and continues to burn through cash as it tries to gain traction. The shares have given investors a pretty rough ride in recent years, and the company needed to turn to outside financing last year, which was a bitter pill for shareholders at the time. Microvision also faces stiff competition from massive and well-funded players like 3M (NYSE: MMM) and Texas Instruments (NYSE: TXN), and while some investors like the technology, they often don't share the same level of bullishness as Microvision's outlook for embedded projectors.

What's your call?
Overall, about 90% of the 385 CAPS members rating Microvision are bullish and see it outperforming the broader market. For my part, I think Microvision is too small to hold an advantage over larger competitors that have stronger track records in imaging, so I see big risks in the stock.

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 160,000-plus members have covered.