Beat This Stock!

A basketball or baseball game may have only one winner, but investing offers many roads toward profits. We don't need to find the "best" stock year after year to secure our financial future -- we just need to find really good stocks, really consistently. Now, the collective intelligence of our 83,000-plus Motley Fool CAPS investors makes that task easier than ever.

For every rated stock on CAPS -- like three-star-rated discount brokerage E*Trade Financial (Nasdaq: ETFC) -- there's an even better stock above it in the rankings. Just look for the "Beat This Stock!" button in the top right corner of each stock's CAPS page. Click that button often enough, and you'll climb the CAPS ladder toward the service's No. 1-ranked stock. Along the way, you'll gain a handful of stock ideas that might help you beat the market by an even wider margin than your favorite firm.

So who ranks better than E*Trade? Below are six stocks that ranked higher in the opinion of CAPS investors than the broker whose stock got discounted itself recently. CAPS is a dynamic service, so while these were the companies generated this morning, the list may be different for you:

This is obviously not a list of stocks to buy; instead, it should be a springboard for your own due diligence. Still, let's examine some of the reasons why CAPS investors think these companies' returns will beat E*Trade and the market alike.

Trash heap of profits
Ever see those guys on the streets of a major city, pushing a shopping cart loaded with all kinds of seemingly useless junk? If you went through that cart, you'd actually find some pretty interesting and useful items. Think of Metalico in the same way. The company collects the metal detritus of auto wreckers, demolition firms, railroads, scrap dealers, and peddlers. It then recycles the ferrous and non-ferrous metals for sale to steelmakers, minimills, and foundries.

This regional scrap recycler operates primarily in upstate New York, though it has facilities in a number of other states. While Metalico has enjoyed excellent returns over the past year, that has been in large part the result of international demand for steel, copper, and aluminum. Prices for these metals have been at record levels for awhile now, and it seems they should remain that way for the foreseeable future, as emerging economies require vast amounts of these commodities. Of course, that's also where the risk comes in.

Top-rated CAPS All-Star Sinchiruna, with a 99.69 player rating, finds a lot of potential for the scrap recycling industry to become a "burgeoning" one.

It's a fairly small but growing entity in the scrap metals recycling industry; an industry which I feel has been overlooked by investors during this commodities bull market... [M]etals recycling will ... provide for the increasing metal demand as prices for all the industrial metals continue to rise... While I don't believe the recyclers collectively will satisfy the demand worldwide, I do think recycling will become a burgeoning industry.

Of the more than 400 investors who have rated Metalico on CAPS, only two have seen fit to think it will underperform the market, and none have yet penned a reason for their thoughts.

Just beat it!
Is CAPS correct? These companies may rate higher than E*Trade, but will they actually top its performance going forward? Many are looking for the brokerage house to rebound, while emerging economies may be cooling off. Head to Motley Fool CAPS and share your opinion on your favorite stock to beat.