Beat This Stock

There can only be one winner in sports. Whether it's the World Series, the Super Bowl, or the Stanley Cup, a single team comes out on top.

But in investing, while one stock may indeed have the greatest return in any one year, there are still many roads available to profits. To fund our financial security, we don't need to find the "best" stock year after year. Just finding really good ones, really consistently, will help us achieve our goals.

To do that, we'll turn to the 76,000 investors at Motley Fool CAPS. We'll look for CAPS' top-rated stocks -- and then find the companies that our investing community thinks can beat even those superstars. For example, GPS maker Garmin (Nasdaq: GRMN) is one of CAPS' highest-rated stocks, more than doubled in price over the past year. Yet as good as Garmin has been, and as bright as its prospects are (as indicated by its five-star rating), there are companies that rank even higher in investor sentiment.

Finding them is easy. Go to the CAPS page and plug in the ticker for Garmin. In the top right corner, click the "Beat this Stock!" button, which gives you a company with a higher rating. While CAPS shows only one- to five-star ratings, behind the scenes, all companies in CAPS have a numerical ranking. As the service explains, "In other words, there is a No. 1 stock in CAPS and a worst-ranked stock in CAPS." If you click enough times, you'll eventually arrive at the World Series winner of stocks in the CAPS universe.

So who ranks better than Garmin? Below are five stocks that rank higher than Garmin in the estimation of CAPS investors. We'll then take a look at some of the reasons why CAPS players think these companies will outperform not only the market, but Garmin as well.

Company	1-Year Return	5-year Expected Growth Forecast	CAPS Rating
Garmin	115.05%	20.91%	*****
Littelfuse (Nasdaq: LFUS)	4.60%	16.00%	*****
Smith & Nephew (NYSE: SNN)	22.55%	14.48%	*****
SK Telecom (NYSE: SKM)	23.46%	7.78%	*****
EnerSys (NYSE: ENS)	38.81%	13.00%	*****
WisdomTree International Utilities Fund (AMEX: DBU)	30.42%	N/A	*****

Sources: Yahoo! Finance; Motley Fool CAPS.

This is obviously not a list of stocks to buy; instead, it should be a springboard for your own due diligence.

Searching with laser-like focus
While there's at least one company that beats even WisdomTree's exchange-traded fund (check CAPS to discover its identity), would it really be better than Garmin, the navigation-systems maker? Garmin recently "lost" the mapmaking acquisition battle to rival TomTom, but in the process, it may have won the war. Of the more than 3,800 investors who've weighed in on it, 96% believe it will outperform. (WisdomTree's fund garners only 33 votes, all "outperform.")

Elsewhere, CAPS investor bluestar42 noted last year that South Korean wireless provider SK Telecom's growth potential lies in international markets rather than at home. That pretty much remains the case for the Motley Fool Global Gains recommendation today:

This is the market leader in wireless telecom in South Korea. Areas for growth include value added services and international expansion ... Also check out "U Life" on their website. SKM has a U.S. joint venture with Earth Link that is called "Helio", they partner with China Unicom and also with [Vietnam's] S-Fone. They are on the cutting edge of wireless, in my view, so they may be successful with international expansion. The risk here is that the market in South Korea, their primary market, is near saturation for basic cellular service. They need to execute successfully on the new fronts, mentioned above, to continue growth.

Meanwhile, U.K.-based medical device maker Smith & Nephew has been reporting robust growth over the past year. In the latest quarter, though, its profits slipped because of charges related to a settlement among it and three other companies and the federal government. The case involved allegations that S&N and the other firms provided doctors who used their products with money and free trips. However, CAPS player korhonen thinks the underlying fundamentals are still sound:

SNN has exceeded earnings estimates for the past four quarters (but not in today's earnings report). This quarter's earnings downturn reflects a short-term "slump" but projected growth is expected to remain strong. Fundamentals are still strong.

Just beat it!
That's what some top investors are saying about stocks that have been rated higher than Garmin. But will they actually perform better over the year ahead? Go to Motley Fool CAPS and let us hear what you have to say about your favorite company. Is it the stock to beat?