Great Call on Wells Fargo! What's Next?

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I'm pretty sure the issues with the global banking system will get nominated for Best Drama at next year's Golden Globe awards. As gut-wrenching as the events have been, they also may have created some fantastic opportunities in stocks like Wells Fargo (NYSE: WFC), Goldman Sachs (NYSE: GS), and Bank of America (NYSE: BAC).

A significant amount of banking pessimism has remained on The Motley Fool's CAPS community, leaving Wells Fargo -- along with much of the rest of the banking industry -- stuck with a mediocre three-star rating, or lower.

CAPS member alberta911, however, was one of the CAPS members who was all over the low prices on Wells Fargo's stock. Although pessimistic on the bank at the end of 2008, this savvy player flipped a thumb up in early March and has since notched nearly 160 points on that one call.

alberta911 is one of CAPS' All-Stars -- players with a rating of 80 or greater -- and has managed a stock-picking accuracy of 56% while racking up nearly 5,000 points. Wells Fargo isn't this player's only great call. Here's a look at a few of the other prescient picks:

Company	Date Picked	Call	Points	CAPS Rating (out of 5)
Bank of America	3/5/09	Outperform	148	***
Silver Wheaton	11/17/08	Outperform	104	****
Las Vegas Sands (NYSE: LVS)	3/17/09	Outperform	102	**

Data from CAPS.

So, what is this investor looking at these days? Here are a few of the most recent calls on CAPS:

Company	Date Picked	Call	CAPS Rating (out of 5)
Apple (Nasdaq: AAPL)	6/18/09	Outperform	***
Research In Motion (Nasdaq: RIMM)	6/18/09	Outperform	**
Rio Tinto (NYSE: RTP)	6/18/09	Outperform	****

Data from CAPS.

While not all of these picks may pan out, they could be a good place to start further research. I decided to take a closer look at Rio Tinto.

From banking to bauxite
While banking shares have been on a scorching run lately, many experts are concerned about the lengths that were taken to save the banking system. Specifically, the U.S. government has extended a huge amount of capital to companies like Bank of America, AIG, and General Motors. The concern is that these measures could come back to haunt us in the form of price inflation.

Many of these same inflation-fearing experts have pointed to commodities and commodity-producing companies as a way for investors to protect their portfolios. Does Rio Tinto fit the bill? You bet. The company is a huge iron producer and also plays in the coal, copper, gold, diamond, and aluminum markets.

But we don't have to hope for a nasty bout of inflation for commodity-producing companies like Rio Tinto to do well. Should the measures that the U.S. and other governments have taken end up reviving the global economy, demand for commodities, particularly from infrastructure-happy emerging markets, would likely tick up.

Though Rio Tinto hasn't secured a five-star rating on CAPS, the community has still been markedly positive on the stock, giving it 1,260 outperform ratings versus just 45 underperforms.

CAPS All-Star bridgeboy0 is one of the folks who sees inflation on the horizon, and recently gave Rio Tinto a thumbs-up, saying:

When things turn around it will be a result of the governments around the world having pumped money of all kinds into the system. This will cause a surge in inflation as economies start to tick up. That's why I've been and continue to be bullish on precious metals and the miners of said metals. Really, anything that is sensitive to inflation is a good place to be.

I've gone ahead and given Rio Tinto a thumbs-up in my own CAPS portfolio, but here's the important question: What's your take? Will its commodities exposure help it swim against the economic tide? Get in the action by clicking over to CAPS. CAPS is absolutely free and already has more than 135,000 stock pickers chipping in to find the best stocks out there.

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