5 Stocks Approaching Greatness

Some companies are obviously great investments -- in hindsight. Sure, we should have bought Starbucks at its IPO and earned a huge return over the years. Yet for every stock out there screaming "buy me," others simply give us a nudge and a nod. How can we tell tomorrow's obviously great investments from the thousands of pretenders?

The stars' walk of fame
On Motley Fool CAPS, we can find these opportunities among our four-star stocks. In CAPS' proprietary ratings system, they rank higher than most of the other 5,600 stocks in the CAPS universe, but they're just shy of superstardom. Their five-star peers get all of the attention, but we can sift through CAPS to find some four-star companies approaching greatness, including these names:

• Take-Two Interactive (Nasdaq: TTWO)
• TheStreet.com (Nasdaq: TSCM)
• Harvest Natural Resources (NYSE: HNR)
• AgFeed Industries (Nasdaq: FEED)
• Internet Capital Group (Nasdaq: ICGE)

Some of these names might surprise you. Motley Fool Rule Breakers recommendation Take-Two has an enduring franchise in its Grand Theft Auto video game series, and the fourth installment has exceeded all expectations. Yet the takeover offer from Electronic Arts (Nasdaq: ERTS) is set to expire this week, and despite Take-Two's brush-off, a tough market has made a merger almost a necessity.

Even familiar names can still offer some of the best opportunities. Perhaps we've just forgotten the potential they still hold. However, CAPS' 100,000-plus investors chose these companies as less obvious sources for tomorrow's great buys, so let's see why they might merit your attention.

Hit the street
You can't separate TheStreet.com from investing entertainment mogul Jim Cramer, but you wouldn't want to, either. Even so, the once solely financial enterprise is morphing into something much more than just stocks and investing. It acquired online marketing company Corsis earlier this year, in an attempt to create a one-stop shop for interactive marketing and advertising services, and its purchase of Bankers Financial Products late last year gave it a presence in the Internet consumer-banking market. These acquisitions allowed TheStreet.com to post the gains it did last quarter, even though the market, not fully appreciating the gains, pinched the stock.

As the public embodiment of TheStreet.com, however, Cramer is savvy enough to know that he would do well to continue his association with his baby. His three-year contract extension was a recognition of this symbiotic relationship. Recent results might suggest that the company needs Cramer to keep pulling in readers, but the changes taking place within the company also suggest that it wants to be more than just Cramer's offspring.

CAPS player TD4Me has been warming for a while now to the idea of having TheStreet.com become a broader, media-rich empire:

TheStreet.Com is a [brand name] with staying power. They have added expenses from their new website launch and the care and feeding of their resident [Motley] Fool, JC, but I think overall they will do very well, with their advertisers, membership fees and media partners. They have a very broad and deep range of influence and I think it will continue as one of the most powerful forces in the financial media. ... I'm a bit more confident of TSCM the second time around, because during my first holding period we were still waiting to see if JC would re-up for a longer period contract. Since that is now old news, I'm a lot more sure of TSCM.

A great opportunity for you
You've heard directly from CAPS on TheStreet.com, but do you agree? Are these four-star stocks still investment-grade material? On Motley Fool CAPS, you can give your input and influence the ratings. Whether you make an outperform or underperform call, near-term or well into the future, your opinion counts.

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