Should You Buy These Stocks Now?

5 Recommendations

Some stocks simply have such great potential that "everyone" knows they're a good buy today. Yeah, right.

If we knew in advance that Sadia would return more than 1,200% since it began trading in 2001, we'd have mortgaged our house on it -- and yours, too! It's easy to see which companies have been winning investments after the fact. We need to know ahead of time which stocks will grow hundreds of percent in value over the years.

That's where Motley Fool CAPS comes in. The more than 85,000 professional and novice investors in CAPS rarely agree on a stock's prospects. Motley Fool Hidden Gems recommendation Jones Lang LaSalle (NYSE: JLL) is a well-respected, top-rated stock, but seven of the 306 CAPS players to rate it still believe it will underperform the market.

When you come across a stock that everyone on CAPS thinks will outperform, you've got something special. Here are a handful of those "obvious" investments.

Company

Bulls

All-Star Bulls

Price

Return on Capital, TTM

Utah Medical Products (Nasdaq: UTMD)

116

46

$30.90

16.0%

SPDR S&P Oil & Gas Equipment
& Services
(AMEX: XES)

111

53

$38.80

NA

ProAssurance (NYSE: PRA)

39

15

$50.66

10.7%

BBVA Banco Frances S.A. (NYSE: BFR)

32

10

$7.88

11.7%*

Nidec (NYSE: NJ)

29

6

$16.70

9.4%

Sources: Motley Fool CAPS and Capital IQ, a division of Standard & Poor's. TTM = trailing 12 months; NA = not applicable; price is last closing price. * Return on equity.

As always, none of the companies on this list should be considered formal recommendations -- just starting points for further research. We've simply used CAPS to lighten your workload.

Motoring on
There's no need to put Nidec on the spin cycle. The company has enjoyed tremendous growth over the years as being the unheard-of hard-drive motor manufacturer that powered the drives in the Apple (Nasdaq: AAPL) iPod. You'll find them as well in game consoles, audio/visual equipment, home appliances, and office and computer equipment such as CD-ROM drives and laser printers.

Nidec has also expanded to target the automotive market with large brushless DC motors. Developing energy-efficient motors will be a key component of car design, and Nidec is or will be putting its technology to work in power-steering systems, engine cooling, suspensions, and brake systems, particularly as hybrid vehicles become more and more popular. With their quiet motors and long life, automotive products will be key for future growth.

Not only does this quiet company make quiet motors, it flies under the radar of most analysts, too. Surprising for a $9 billion company that has been part of one of the most iconic technological developments of the past decade.

Yet even though many CAPS investors, like TheParadox, have overlooked Nidec, they are finding the potential for growth promising, given its position, as illustrated in this week-old pitch:

I looked at the stats and they seem fairly fine. No analysts coverage ... interesting, seems reasonable and profitable, kinda inefficiently run, but room for improvement is always good. Never heard of them. ... [T]he fact they might move into mid size motors ... is great because DC motors might become a much needed product in a few years.

A year ago, CAPS player Mappicus found not only the technology intriguing, but saw Nidec as a play in Japan's economic recovery as well:

World leader in the small electric motors, particularly in hard drives. Despite partial shift towards flash memory in handheld devices, market for hard drives of all sizes will remain strong for the foreseeable future. In the shorter term, this also is a play on a possibly strengthening yen verses the dollar and the general recovery of the Japanese economy.

Let's hear from you
How about your take on these or other "obvious" winning investments? Is this a chance to dig deep with your portfolio to mine the next "buy now" stock?

If you want to add your two cents, sign up to join the Motley Fool CAPS community, which is 100% free.

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Related Tickers

Nidec Corp (ADR)

NJ Up! $11.44 +1.09 (+10.53%) 4:03 PM
CAPS Rating:
44 Outperforms
4 Underperforms
Rate This Stock

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