Tomorrow's Monster Stocks?

Stocks that climb to 10 times their original price are a rare breed -- but they're not impossible to find. Especially when you have Fools for friends.

The market's best stocks include companies that have risen hundreds of times in value over the past decade. These aren't penny stocks; they're viable companies with sound business prospects, achieving phenomenal returns every year. Finding just one or two of these companies can help you establish a winning portfolio.

Stalking the monster
To find tomorrow's monster stocks, we'll enlist the more than 80,000 investors at Motley Fool CAPS. We've compiled a list of the most successful CAPS players, called All-Stars, whose picks have doubled, tripled, or even quadrupled in price. Then we've plucked some of their recent picks for stocks they find equally promising.

Of course, this is not a list of stocks to buy -- or, for those monster stocks that our CAPS All-Stars have already found, sell. Just consider them starting points for your own further research.

A touching moment
You don't have to be working on the railroad to know that rail transportation is becoming more popular with investors. Particularly since Warren Buffett announced he was buying rail stock -- shares, not the cars -- investors have been looking more closely at the industry. Yet while Buffett has been investing more heavily in Burlington Northern Santa Fe, he's been cutting his stake in Norfolk Southern by about half.

Norfolk Southern is an amalgamation of about 21,000 miles of track in the eastern U.S., a culmination of numerous mergers that extends as far back as the 19th century. The freight service generated 25% of its third-quarter revenue from hauling coal and another fifth from intermodal transport, the types of cars that can be used either as railcars or truck trailers.

Railroads have been experiencing a bit of a decline in traffic volume lately as the economy slows, and Norfolk Southern is no different. In the third quarter, volume was off by 4%, but the company was able to offset half of those declines by raising prices. Although coal volume slipped 1% in the quarter, export tonnage increased 44%, partially because of increased demand due to a weaker dollar. Still, profits fell 7% when compared with last year.

Over on CAPS, 97% of the investors think Norfolk Southern will outperform the market, some of whom, like CAPS investor RUSHmusic, see the international demand for coal being one of the primary drivers for growth.

Norfolk Southern is a major transporter of [metallurgical] coal and cheapest of the rail stocks. Europe is increasing its consumption of bituminous coal and currently 50 million tons of U.S. coal is being exported to Europe with that figure increasing next year. NSC's dividend is solid.

That dividend yields about 2%. The company expects to continue increasing its dividend, as business conditions permit, until it's paying out about one-third of its net income.

With oil at the $100 per-barrel level, railroads become an even more attractive alternative to trucks, and consider that not too many more railroads are being built these days. Consolidation is indeed the watchword for this industry.

A chance for scary growth
Now's the opportunity for you to weigh in on Norfolk Southern, or any of the other stocks these All-Stars see as achieving monster growth. Agree with their views? Tell us on CAPS. If you don't agree, let us know that, too. This is the place where your voice counts just as much as everyone else's.