5 Stocks You're Gonna Want to Own

Managing large amounts of computer data in real time can prove to be a real problem for companies. As software has become ever more complex, database management has developed into object-oriented software programming – essentially, smaller software "building blocks" that perform specific functions but can be aggregated into a larger software system. While relational databases still permeate the industry, object-oriented software can help companies digest and manage large amounts of information faster and more efficiently.

One of the leading companies that assists businesses in managing their information overload is Versant (NASDAQ:VSNT), which provides object-oriented management solutions primarily to telecoms, defense contractors, and health-care and financial-services firms.

Versant isn’t alone with high-end databases; some of its larger, better-financed competitors include Oracle (NASDAQ:ORCL) and Progress Software (NASDAQ:PRGS). While that means it's no easy task for the company to win clients, its quarterly earnings released last week showed a 30% increase in revenue along with a 19% increase in profits, suggesting that there is enough business for a number of players to succeed.

Screening for likability
Versant showed up on a screen of companies that have enjoyed growing investor support these days after starting off the year on the outs. Versant jumped from a two-star Motley Fool CAPS rating (out of five) in January to four stars today, while also enjoying a valuation below that of the market.

CAPS is a 105,000-member investor community that rates thousands of stocks on whether they will outperform or underperform the market. While it’s not a predictive service, in its first year of operation, the trailing returns of the stocks in the CAPS universe correlated precisely with their relative CAPS ranking. Top-rated four- and five- star stocks outperformed low-rated one- and two-star stocks.

Here are a few of the other companies the CAPS screener found that are currently enjoying significant investor support:

Sources: Motley Fool CAPS; Yahoo! Finance.

Naturally, this is not a list of stocks to buy and sell, but rather a starting point for further analysis. Investors have raised their outlook significantly on these companies, and that may mean there is still room to move.

A fine mesh filter
Versant has been building its reputation, but it has a relatively small following thus far in CAPS, with just 40 investors rating it (and it has no analyst coverage, so it's flying under the radar here). Yet of those 40, more than one-third are All-Stars who feel it will outperform the market. These include top-rated CAPS investor RonChapmanJr, with a 99.97 player rating:

I used to be in database management (sort of) and it isn't easy. This company has been doing well with it. It is pricey right now, but this is CAPS, so I'll give it a shot.

Another player who apparently thinks Versant is a good growth company (considering his screen name), Versant111 believes that a wider proliferation of object-oriented software will propel the company forward:

Small, growth, nice margins. Any tick up in object-oriented database prevalance, and VSNT soars. Speculative, but huge upside.

Takes a CAPS bow
There are many ways to screen for stocks to beat the market. You can use the new CAPS screener to find other stocks you're gonna want to own, but if you want to see what other stocks CAPS investors are marking up to four and five stars, head over to Motley Fool CAPS now -- it's completely free to join.