For every stock out there screaming "buy me," others simply give us a nudge and a nod. While all the attention might be focused on their five-star peers, we can sift through Motley Fool CAPS to find four-star stocks giving us a sign that they're approaching greatness.
These opportunities -- including familiar names and beaten-down companies -- rank higher than most of the other 5,400 starred companies, and it pays to investigate their potential. For consideration today, I have this handful of stocks on their way to fame.
- 8x8 (Nasdaq: EGHT )
- North American Palladium (NYSE: PAL )
- Stillwater Mining (NYSE: SWC )
As the 180,000-plus CAPS members have chosen these companies as less obvious sources for tomorrow's great buys, let's see why they might merit your attention.
In the sight of greatness?
Communications infrastructure specialist 8x8 has seen the future of cloud computing, and 8x8 is it. By partnering with Virtual Computing Envnironment (VCE) -- itself a partnership between EMC (NYSE: EMC ) , Cisco (Nasdaq: CSCO ) , and VMWare (NYSE: VMW ) -- it will be able to attract government contracts and large-scale enterprises as it broadens its customer base.
VCE is the premier name in high-speed cloud computing, as its VBlock platform provides a central repository for network, storage, virtualization, and management technologies. By giving customers a one-stop shop for their cloud needs, 8x8 could potentially leap to the forefront of an otherwise fragmented industry.
Not everyone's sold on tying itself so closely to VCE, though. Even though the consortium is akin to the top brand name in the business, not everyone wants to pay top dollar. And cloud computing itself allows for lower-priced competitors to offer similar services at a fraction of the cost. It may be a short-term high for 8x8 that turns into an expensive long-term drag on performance.
CAPS member gdett2 admits that it's a cutthroat business with a rather shallow moat but thinks 8x8 has the wherewithal to succeed in it: "This is a rather competitive field. They do not have a moat but they seem to be doing well and moving to provide cloud resources."
Let us know on the 8x8 CAPS page whether you think it will ascend to even loftier heights as a result of its grand plan.
Food for thought
Platinum and palladium represent some really large opportunities for the top two miners in the space, Stillwater Mining and North American Palladium, but both also see the risks inherent and believe that gold and other precious metals offer an opportunity to diversify their base. Although each has developed plans to realize those inflection points, the markets have reacted differently to their stocks.
Stillwater Mining offered to purchase Canadian miner Peregrine Metals for CDN$3.16 a share, a huge premium to what it was trading at on Canada's exchanges. Buying Peregrine gives it access to its Altar gold and copper mine in Argentina, but the market thought the price paid was too high and dropped the stock on the news.
North American Palladium, on the other hand, is working toward a decision on when to kick into production on its Vezza gold project in Quebec's Abitibi region, where other miners, including Aurizon Mines and IAMGOLD (NYSE: IAG ) , also have stakes. NAP just updated its drilling results from its exploration program there and announced that it would provide a solid foundation for expanding its gold-mining business. Its shares soared 18% yesterday.
Perhaps it's the difference between buying growth and growing it organically, but both miners should still be seen as unnecessarily discounted prospects. CAPS member LibbyLoo00 finds that North American Palladium's future will be driven by industrial demand for its primary metals business, while international limitations being considered by certain countries -- South Africa and Zimbabwe, which account for 80% of the world's platinum group metals, are mulling nationalization and domestic ownership rules -- will drive results higher.
Scarcity. Industrial need. It looks like it's on the bottom of a long slide and ready to start back up. Some African sources look like they will tighten up due to political issues in those countries. Even more scarcity.
Similarly, lanyimd can't understand the depths of the selloff in Stillwater's stock, considering the market forces at play: "Palladium is needed, demand for it will rise; SWC is one of only a few major sources; and there is no reason the stock recently retreated."
At the very least, you should keep a close eye on both platinum metals group miners over the next couple of weeks as all the fresh data pours in. To do that, add Stillwater Mining and North American Palladium to your Foolish watchlist, and then enjoy a steady stream of fresh news and Foolish analysis. You'll be ready when the time is right to act.
A great opportunity for you
Investor sentiment suggests that these four-star investments still seem to be on their way to five-star greatness, but it pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page.
Sign up today for the completely free service, and let us hear what you have to say about the great and almost great companies that interest you.
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