Drink In These 5 Top Stocks

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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 water cooler daily to rate stocks and delve into their merits as investments.

Our 130,000-strong CAPS community -- where members give the thumbs-up or thumbs-down to some 5,300 stocks -- has earned its points by seeking out the businesses it thinks will outperform the market. Below, we'll take a look at some of the top stocks in the CAPS universe that you're talking about the most and whether you think they'll continue their winning ways.

Stock	CAPS Rating (5 stars max)	No. of Calls	% Outperform Calls
Alcoa (NYSE: AA)	****	2,478	92%
Burlington Northern (NYSE: BNI)	****	2,215	97%
Deere (NYSE: DE)	****	2,442	95%
Mosaic (NYSE: MOS)	*****	2,521	96%
XTO Energy (NYSE: XTO)	*****	2,214	98%

A tall drink of water
As the company kicking off the torrent of earnings reports over the next few weeks, Alcoa didn't do the market any favors yesterday, reporting a worse-than-expected loss of $497 million. Last year it had a profit of $303 million.

With aluminum prices falling, sales to carmakers and plane manufacturers tumbled 41% in the quarter, indicating that the recession still has the economy in its iron grip. Worldwide aluminum inventories crested at their highest levels earlier this month, pushing prices down 56% to $1,485 a metric ton. Alcoa, Rio Tinto (NYSE: RTP), and other ore miners have been cutting production to stem the losses and Alcoa slashed its dividend 82% to help conserve cash. With $1.4 billion in proceeds from an equity and convertible notes offering along with $5.2 billion available on a revolver, the aluminum giant isn't in danger of running out of money any time soon.

Still, the auto industry has a pulse that's barely palpable, and airplane manufacturers Boeing (NYSE: BA) and Airbus have had large numbers of cancellations. The former lost four plane orders in the first quarter, while Airbus only added a net total of eight orders. Alcoa management remains confident that this quarter is the worst of it, and CEO Klaus Kleinfeld is hopeful that the various stimulus plans are targeting industries that will create demand for aluminum. He does see demand falling an additional 7% this year, but he thinks the markets are stabilizing.

With smelter demand ebbing, Alcoa is cutting back refinery production, which in turn will reduce alumina production at least into the next quarter. That may create some short-term pressure on revenues, profits, and margins, but it also ought to help provide a floor for prices. That will generate a base for longer-term improvement, and investors are appropriately looking further out than just the next few months.

For example, CAPS member AlkaliX thinks a combination of increasing demand and a weaker dollar will form a platform for prices to rise over the next two years:

I think metals will outperform in the next 18 - 24 months.

Metal prices should rise with increase in demand and fall in the value of the dollar. I think that it will be hurt by increases in the cost of natural gas - but still will outperform in this time frame.

Gather 'round
With so many good opinions about today's top companies, why not grab a pointy paper cup from the dispenser and join us at the Motley Fool CAPS water cooler, 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.