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 companies can help you establish a winning portfolio.
Stalking the monster
To find tomorrow's winners, we'll enlist the more than 135,000 monster trackers at Motley Fool CAPS. We've compiled a list of the most successful CAPS members, dubbed All-Stars, whose picks include ones that have doubled, tripled, or even quadrupled in price. Then we've plucked out some of their recent picks for stocks they find equally promising.
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
Well, that didn't last long. All that talk about "green shoots" and an economic recovery seemed to wilt faster than wheat in a drought as the market's recent rally stopped Monday. The brief elation at turning positive for the year gave way to the markets falling back below their starting points. It underscores the theory that the rally was not the first signs of a true recovery but rather the far too typical "bear market rally."
Lots of indicators say we're still a long way from recovery. Housing remains extremely fragile, and homebuilders lost confidence quickly as mortgage rates rose after a sell-off in Treasuries. Unemployment remains high and is growing, albeit at slower rates. That doesn't mean a recovery is on the horizon. When you look at the number of hours employees put in, you find that the average workweek has fallen to its lowest level since 1964. Companies have been cutting back on overtime and reducing workweeks. It's not so much how many people work, but how long they're actually working.
The commodities sector, though, has been on a tear as investors buy into the "green shoots" recovery. For example, despite inventories of aluminum rising to record numbers -- and five times higher than where they were last year -- prices continued to be bid up. Analysts anticipate that aluminum inventories will exceed 5 million tonnes by the third quarter even as prices hit a five-month high of $1,701 a tonne last week.
Shares of aluminum producers have rebounded. Alcoa's shares have risen more than 80% over the past three months, while Century Aluminum's (Nasdaq: CENX ) stock is up more than 380% in that time.
Even over the past month, companies that make up the Metals & Mining sector tag at CAPS have shown strength, rising more than 16% and putting it in the top 100 of CAPS' 853 sectors.
Investors continue to like Alcoa's prospects. CAPS member Rico52 expects the push for greener cars to expand the demand for the high-strength-to-weight metal.
Money sitting on the sidelines is being pumped into commodities. Metals and oil will do well for the next 12 months. [Alcoa] will be a leading provider of light weight metals for the Obama administrations little "Green Cars."
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. 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 you think these are tomorrow's monster stocks.
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