Finding Stocks at a Fever Pitch

The collective power of thousands of investing minds is the driving force behind Motley Fool CAPS, a leading investor intelligence community. Membership has actually grown to more than one hundred thousand investors: professionals, novices, and every level in between.

One of the service's unique features is the ability to not only rate a company on whether you think it will outperform or underperform the market, but to express why you think it will, in as much detail as you want. These analyses, or "pitches," can be as simple as "This stock has a low P/E ratio," or as complicated as a multipage, footnoted thesis. In the context of the overall assessment of the stock, a pitch is another data point to consider.

Throwing strikes
Useful analyses are those that give salient details about a company and its prospects -- on both the bull and the bear sides -- and the best ones earn recommendations. Not everyone can become famous picking stocks and detailing their reasons, but we call the investors who merit the most recommendations for their analyses our "pitch-writing superstars." Let's look at these investors and some of their best recommendations and get a sense of what makes up strong analyses and winning investing.

Not only has chk999 received nearly 500 combined recommendations for his pitches, he also has commented on virtually every single pick he has made and is a top-rated All-Star to boot, with a 99.99 player rating. Here are a few of his most recent stock picks.

Company

CAPS Rating

Call

CAPS Score

Pitch

Advanced Battery Technologies (Nasdaq: ABAT  )

**

Outperform

22.72

Read it!

Advantage Energy Income Fund

*****

Outperform

1.46

Read it!

American Superconductor (Nasdaq: AMSC  )

**

Underperform

8.94

Read it!

Chemical & Mining Co. of Chile (NYSE: SQM  )

*****

Outperform

(13.73)

Read it!

Cleveland Cliffs

****

Outperform

2.27

Read it!

Vale (NYSE: RIO  )

*****

Outperform

2.08

Read it!

GameStop (NYSE: GME  )

****

Outperform

(3.17)

Read it!

Solarfun (Nasdaq: SOLF  )

***

Outperform

(12.93)

Read it!

Transocean (NYSE: RIG  )

*****

Outperform

2.21

Read it!

UnitedHealth

****

Outperform

1.23

Read it!

On the bubble
Although chk999 sees Solarfun as having a ways to go before the solar bubble bursts, CAPS investor owshx believes this is a movement that could become a worldwide phenomenon.

Solarfun is [a manufacturer] of photovoltaic cells and modules in China. For its PV modules, SOLF produces 100% of the PV cells in-house. Company was founded in 2004 and posted $2.4 billion in total revenue last year (only $630 million in '06) and is on pace to do $4.8B this year. With only a 28.8 P/E and 15% institutional holding, get in while the price is low. This is not the solar "FAD" of years past, Going Green is a worldwide trend that will continue to develop and grow as oil prices climb upward. The increase in oil demand of China, India, Brazil, Russia, [Central America, etc.] will greatly outweigh any decrease in demand the US and EU see due to higher prices.

Rigging the game
Deep-sea drilling for oil pretty much has one dominant name: Transocean. Its preeminent position has attracted investors like tradingfool2, who finds its deal with Petrobras, after that company's major oil discovery, to be an irresistible combination.

RIG specializes in and is pretty much the only game in (really)deep sea rigs. They won't be able to build them fast enough as exploration in deeper waters becomes inevitable. PBR major discovery and subsequent contract with RIG is a prime example.

A hard charger
Lithium-ion batteries are seen as the solution to the electric car conundrum,  and manufacturer Advanced Battery could reap big profits if and when such vehicles become commercialized. However, not everyone is certain that Advanced Battery has what it takes to succeed. One of the top-rated CAPS participants, denkab. questions the company's patent portfolio.

Umm... "Company owns 6 patents in China". "A cellular phone battery pole plate; polymer lithium-ion battery and its production method; large capacity polymer lithium-ion battery and its production method; an ultra-thin polymer lithium-ion battery for a miner's lamp and its production method; walkie-talkie lithium-ion battery and its production method and mobile phone battery and its production method". That's some intellectual property!

Inside pitches
Now just because a highly rated All-Star investor writes a pitch for a company is no reason to go out and buy and sell those stocks. You still need to perform your own due diligence. But it's worth considering what they've said.

A Foolish stance
Step up to the batter's box of Motley Fool CAPS and make your opinions known. Because CAPS is a completely free service, throw as many pitches as you like at the stocks of your choice. You'll help fellow investors make better decisions.

UnitedHealth Group is a Motley Fool Inside Value selection. UnitedHealth Group and GameStop are Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.


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