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Tomorrow's Monster Stocks

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Stocks climbing to 10 times their original price are rare breeds -- but they're not impossible to find. Especially when you have Fools for friends.

The market's best stocks include companies that have risen dozens of times in value over the past decade. These aren't penny stocks; they're viable companies with sound business prospects, achieving phenomenal returns every year. Finding just one or two of these monstrously successful firms can help you establish a winning portfolio.

Stalking the monster
To find tomorrow's winners, we'll enlist the more than 120,000 monster trackers at Motley Fool CAPS. We've compiled a list of the most successful CAPS members, dubbed All-Stars, whose picks have doubled, tripled, or even quadrupled in price. Then we've plucked out some of their recent picks for stocks they find equally promising.

Player

CAPS Member Rating

Monster Stock

CAPS Score

Recent Stock Pick

CAPS Rating (out of 5)

BravoBevo

99.97

First Solar

547.09

AgFeed Industries (Nasdaq: FEED  )

*****

TMFDeej

99.65

TBS International

358.48

Verizon (NYSE: VZ  )

****

MTBB

92.01

The9 (Nasdaq: NCTY  )

342.92

Frontline (NYSE: FRO  )

****

TrackBofASec

91.79

CF Industries (NYSE: CF  )

305.46

Gilead Sciences (Nasdaq: GILD  )

****

JBouchard

88.24

National Oilwell Varco

162.36

Barrick Gold (NYSE: ABX  )

*****

Of course, this is not a list of stocks to buy -- or, for those monster stocks that our CAPS All-Stars have already found, sell. Just consider them starting points for your own further research of extreme buying opportunities.

In search of Bigfoot
The potential for an oversupply of tankers would seem a plausible supposition in this market. As demand for oil continues to plummet, the need for more tankers to ship it around will fall as well. Yet it's also possible that with the credit markets as tight as they are, the number of new tankers coming onto the market might not be so great, which would allow Frontline's profit margins to hold up.

Yet CAPS member TheHuney finds other reasons to think the tanker company might not be a strong investment now:

But here's the real kicker; everyone talks about [Frontline]'s wonderful dividend. Of course, what they don't look at is the sheer absurdity of this business model. For FY '07, [Frontline] had earnings per share of $7.62, but [declared] $8.30 cash dividend per share. Also, it's worth noting that they pulled in even less in cash flows from operations at $7.30 per share, so their dividend was 109% of their earnings and 114% of their CFOs. Are you kidding me? How is that sustainable, especially when you have such high leverage?

Worries about the health and stability of the global financial markets persist. Even if we have a rally now and then (like that seen on Friday because of the expected Treasury appointment), fear is still the watchword. CAPS member CorbinB2 thinks Barrick Gold could be a beneficiary, if only the economy would show some stability:

Gold and other precious metals have taken a hit due to liquidation and should increase, just a matter of how long it takes the overall economy to start showing signs of stability.

CAPS member unibeats thinks President-elect Obama’s commitment to improving Internet access for everyone will assist Verizon in further establishing its industry-leading position:

In addition to its attractive cell phone coverage and dataplans, Verizon is one of the largest holders of the fiber optic network within the US. Obama has stated that he will make "Internet more accessible to everyone." The cheapest, simplest, and the most effective way to do that is to lay down more fiber optic backbones, and Verizon will be very happy to do so as the government hands out aids and contracts to make a better Internet a possibility.

A chance for scary growth
It takes more than a few All-Star picks and a quick paragraph to make buy or sell decisions, so start your own research on these stocks on Motley Fool CAPS. You can read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page. And while you're there, weigh in with your own thoughts on whether these are tomorrow's monster stocks.

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

National Oilwell Varco is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletters today, free for 30 days.


Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 24, 2008, at 7:22 PM, dividendgrowth wrote:

    TMFDeej picks VZ..., you can imagine how bad things have become.

    My best picks recently have degenerated into SDS, QID, TWM, EEV.

    My CAPS score is 99.49.

  • Report this Comment On November 25, 2008, at 9:38 AM, mntradeinch wrote:

    Talking about FRO : the "absurdity" of their business model made them pay + 80 $ in total since they started trading NYSE. There is a clear strategy of participation and management for other tanker cos and these participations are then released as special dividend to shareholders. The continuity of strong dividend payouts since years is convincing and not an absurdity at all in my opinion. Interesting presentation on their homepage, see by yourself on page 6 and 14 WHAT their "absurd" business model paid to stockholders......

  • Report this Comment On November 25, 2008, at 11:56 PM, amassafortune wrote:

    I agree with mntradeinch. The current dividend, and the fact that it will be cut soon, does not matter as much as FRO's trend of paying out about 90% of earnings as a dividend. FRO is about 66% off its high and analysts estimates predict a 66% decrease in earnings for 2009. The debt/equity ratio is high and the stock price may take a sizeable hit after Thanksgiving when FRO has its conference call. If an investor can buy FRO in the low 20's next week and FRO gets back to a $12 payout in 3-5 years, the return on initial investment would be hard to beat. Given past performance, and the fact that moving crude and containers will continue to be a solid business model after this recession, FRO is a reasonable investment despite the current debt/equity ratio.

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Related Tickers

2/13/2012 4:01 PM
VZ $38.13 Up +0.44 +1.17%
Verizon Communicat… CAPS Rating: ****
FRO $4.58 Down -0.24 -4.98%
Frontline Ltd. (US… CAPS Rating: ***
ABX $48.03 Down -0.12 -0.25%
Barrick Gold Corp… CAPS Rating: ***
GILD $54.90 Up +1.15 +2.14%
Gilead Sciences CAPS Rating: *****
NCTY $7.75 Up +0.31 +4.17%
The9 Limited (ADR) CAPS Rating: **
CF $182.31 Up +2.16 +1.20%
CF Industries Hold… CAPS Rating: *****
FEED $0.00 Down +0.00 +0.00%
AgFeed Industries,… CAPS Rating: ***

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