It's been 13 months since we began tracking "The Best Stocks Right Now" in Motley Fool CAPS, the Fool's free online investing community. Amazingly, our CAPS community has quadrupled since last January, now comprising more than 83,000 investors.
Back to the present
It's been a rough-and-tumble year for the market, to say the least. The subprime crisis continues to wreak havoc on mortgage-related companies like Freddie Mac (NYSE: FRE ) and PMI Group (NYSE: PMI ) .
Things may appear bleak, but as Mr. Cramer says, there's always a bull market somewhere. In unsure markets like this, however, the bulls can be more difficult to find. That's where CAPS can help. CAPS players rate stocks to either outperform or underperform the market going forward, and the players themselves get rated based on their performance.
Here's this month's list of the top-rated stocks on CAPS.
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Company
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Market
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Medco Health Solutions (NYSE:MHS)
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$26.2 billion
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Tele Norte Leste Participacoes SA
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$9.0 billion
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Dampskibsselskabet Torm A/S
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$2.2 billion
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Atlas Energy Resources
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$1.6 billion
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Canadian National Railway (NYSE:CNI)
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$25.4 billion
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Layne Christensen
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$718.0 million
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Denison Mines
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$1.3 billion
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HealthExtras
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$1.2 billion
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W-H Energy Services (NYSE:WHQ)
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$1.8 billion
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Sociedad Quimica y Minera
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$4.5 billion
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Data from Capital IQ, a division of Standard & Poor's, Yahoo! Finance, and Motley Fool CAPS, as of Feb. 15.
Please bear in mind that these are not formal recommendations. Instead, I offer this list as a jumping-off point for further research. In fact, researching five-star CAPS stocks such as these has proved to be an effective tool for investors.
Medco leads the pack
A newcomer to the CAPS top 10, shares of prescription benefits manager Medco Health have surged 60% over the past year. Medco, a 2003 spinoff from Merck (NYSE: MRK ) , has been buoyed both by a rise in the generic-drug pipeline, and by winning a three-year government contract to provide mail and pharmacy benefits to federal employees. The stock, however, took a minor hit last month following comments from Wal-Mart (NYSE: WMT ) that it will be entering the pharmacy-benefits arena.
Even if Wal-Mart joins the fray, the process of building out the necessary infrastructure will take time, and CAPS investors remain bullish on Medco shares.
Financially, Medco has been a consistent free cash flow cow over the past few years, generating $1.69 billion in cash flow from operations in the last 12 months, with just $158 million in capital expenditures. Return on equity has also increased over the past few years, currently sitting at 13.2%.
CAPS investors are rather taken with Medco -- 474 of 483 investors who have rated it believe it will outperform the S&P 500. General sentiment revolves around Medco's strong positioning in the industry as the baby boomer generation ages, and the expectation that the generic-drug pipeline will continue to surge.
Learn what CAPS investors are saying about Medco Health by heading to its CAPS page. If you'd like to voice your opinion about this stock -- or any stock, for that matter -- join the Motley Fool CAPS community now and make your voice heard.
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