Drink In These 5 Top Stocks

Whether it's the corporate lunchroom, your cubicle, or the local watering hole after work, there are regular places we gather to discuss news, sports or -- if you're like us -- stocks. Here at Motley Fool CAPS, we gather around the virtual watercooler daily to rate stocks and delve into their merits as investments.

Our 125,000-strong CAPS community -- where members give the thumbs-up or thumbs-down to some 5,400 stocks -- has shown a propensity for making prescient market calls. Our data indicates that newly minted five-star stocks offer some of the best opportunities to investors, while the lowest-rated companies fare worst. Below we'll take a look at some of the highest-rated, most talked-about stocks in the CAPS universe, and whether you think they will outperform or underperform the market.

Stock	CAPS Rating (5 max)	No. of Calls	% Outperform Calls
Aluminum Corp. of China (NYSE: ACH)	*****	3,536	96%
Blockbuster (NYSE: BBI)	*	1,453	48%
Halliburton (NYSE: HAL)	****	2,851	95%
Portfolio Recovery Associates (Nasdaq: PRAA)	*****	3,457	97%
Tata Motors (NYSE: TTM)	*****	2,397	96%

A tall drink of water
At what point will we look back at DVD-based movie rentals and think, "How quaint?" You know, kind of like how we look at floppy disks -- or worse, cassette tapes -- for storage today? While movie streaming and on-demand viewing are the wave of the future -- and both Netflix (Nasdaq: NFLX) and Blockbuster now offer such services -- the DVD model remains the foundation supporting the industry today.

Yet investors are left to wonder whether Blockbuster can hang on long enough to see the reality of the alternative movie-viewing experience. Indeed, CAPS member stan8331 sees Blockbuster's business as a prescription for bankruptcy:

If they're incapable of competing with Netflix, I see no future for Blockbuster. Their brick and mortar dvd rental business was profitable when there weren't cheap, easy alternatives. Online streaming is the wave of the future for instant access, otherwise Netflix gets dvd's to you at a very fast rate via U.S. mail. Basing your whole business model on convincing people to spend gas driving to your store in order to pay $4 tax to rent a single DVD (and then spend more gas to drop it off) is a recipe for bankruptcy.

Game on!
Ford's (NYSE: F) decision to get out of the luxury-car market and focus instead on its core nameplate was a shrewd move, even though Land Rover had actually enjoyed sales growth of 4% at the time. But since the brand consisted primarily of gas-guzzling SUVs, selling Land Rover to Tata Motors, along with luxury car Jaguar, amounted to a timely sendoff. Sales of Land Rover plunged 40% in the U.S. last year, and were down 32% in Europe.

CAPS member Airbiz sees Tata closely following the growth of the Asian car market. "I believe the revenue stream of this Co. will follow the growth in the asian auto market and to some extent the increase in chinese auto use and auto parts consumption."

A lot of that may hinge on Tata's $2,500 Nano car. Although it received good reviews, it has suffered setbacks, after the carmaker was forced to abandon a nearly complete plant when local farmers protested. Rather than introduce the car by the end of last year as planned, Tata will build smaller quantities at various locations until its new manufacturing facility can be completed.

Gather 'round
Why not grab a pointy paper cup from the dispenser and join us at the Motley Fool CAPS watercooler, where your input can help guide other investors to stocks with bright prospects for growth? 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.

Sign up today for the completely free service and let us hear what you have to say about the great and almost-great companies that interest you.

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