These Stocks Beat Gas Stocks

On some market days, the headlines are filled with news of individual stocks whose shares have soared over the past year. Other times, investors are bombarded with statistics of how an entire group of stocks from a certain sector or industry has outpaced the general market.

Thanks to soaring oil prices, gas and petroleum is one sector that has received plenty of attention from investors. But I can tell you tales of investments from another sector beating the pants off gas stocks ... and where you can find out more about them.

Would the real hot stocks please come forward?
Using Motley Fool CAPS, investors can get detailed information and community intelligence on not only individual stocks, but also entire sectors, regions, and industries.

Any of the 5,300 rated stocks profiled in CAPS can be "tagged" with a descriptor that groups the company with others that share a certain quality, such as a country of origin, a sector, or an end product. A single click on the Gas tag pulls up a list of 88 stocks that, as a group, have risen a market-beating 11.1% in the past year.

Using the tags in CAPS can lead you to a group of stocks that have more than doubled the return of stocks in the Gas group -- Construction Machinery. Driven by global industrial demand, this tag's 23 companies have risen an even more impressive 30.7% in the past year. Granted, this group is much smaller, and the reasons behind the dramatic growth could be quite different for each company. But CAPS can help us dig under the surface.

From macro to micro
You can sort tag groups quickly by their CAPS ratings, denoted by one to five stars, with five being the best. Then you can view individual companies to show details of just who -- from Wall Street to Main Street -- is bullish or bearish on the company and why. For instance, here are a few of the stocks in the Gas group.

Company	CAPS Rating	1-Year Performance
Chesapeake Energy (NYSE: CHK)	*****	23.8%
Penn West Energy Trust (NYSE: PWE)	****	(18.2%)
PetroChina (NYSE: PTR)	***	40.0%

Sources: Google Finance and Motley Fool CAPS, as of Dec. 13.

Now, here's a sampling of construction machinery stocks that -- judging by interest in the CAPS community -- investors may want to consider:

Company	CAPS Rating	1-Year Performance
Terex (NYSE: TEX)	*****	10.8%
Manitowoc (NYSE: MTW)	*****	60.0%
Joy Global (Nasdaq: JOYG)	*****	32.8%
Caterpillar (NYSE: CAT)	****	19.5%

Sources: Google Finance and Motley Fool CAPS, as of Dec. 13.

Following some of the same trends that have boosted gas stocks, the construction equipment sector is riding strong macro trends in construction around the world. Property development in the U.S. is only part of the growth story here -- construction equipment companies are profiting from booming development activity in emerging markets around the world, such as China and India.

One of investors' favorite stocks in this segment is Wisconsin-based Manitowoc. The company actually operates three diverse business segments: construction cranes, food service, and marine. Increased demand for its variety of lattice-boom and tower cranes is behind a recent surge in shares, and the company has increased guidance for 2007 and 2008. CEO Glen Tellock anticipates more than 20% revenue growth in 2008 thanks to the crane segment, which now makes up more than 80% of revenue for the company.

The company sees margins growing as well, driving increased cash flow. And considering next year's growth projection, the forward earnings multiple of 14.7 makes Manitowoc look like one cheap growth stock. CAPS investors overwhelmingly favor the company as well, with more than 99% of investors who have rated the company predicting that it will beat the S&P going forward.

Joy Global is also one of those sleepy winners most investors don't know about -- the manufacturer of mining equipment has been a 12-bagger in just the past five years alone. In a way, Joy Global is riding the coattails of the precious metals sector, since the company excels in the underground mining equipment used to extract precious ore.

Many CAPS investors expect the increased demand for mining equipment to outpace pricing pressures Joy Global faces against main competitor Bucyrus. Indeed, 599 of 618 investors rating the stock give it the thumbs-up.

Before you buy ...
Of course, investors don't want to be looking in the rearview mirror to find out where they should be investing now. But the underlying reasons behind dramatic run-ups in stocks or groups of stocks can clarify macroeconomic trends that may significantly affect investments. 

No matter where investing ideas come from, investors should always perform their own due diligence and not follow crowds or individual recommendations.