Investors are always hunting for the next big stock -- the dream stock whose price increases several times over when the market finally discovers it. It's easy to look back and discover the 10 best stocks of the past decade. But I'm more interested in the tools that can help me evaluate tomorrow's greatest companies.
Motley Fool CAPS offers a variety of resources to aid Fools in finding tomorrow's leaders. Our 135,000-member community is full of investors helping each other beat the market.
We'll enlist CAPS to screen for tech companies, then get the story behind some of its more highly rated stocks. CAPS' nifty screener will help us find stocks with:
Then we'll tap the collective intelligence of our CAPS members to see whether these companies present real opportunities -- or whether the numbers fail to tell the true story.
Opinions with the numbers
Below is a sample of stocks our screen returned. You can run this screen yourself -- remember, though, that your results may differ from ours as the market changes.
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Company
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Revenue Growth Rate, Past 3 Years
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CAPS Rating (out of 5)
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ReneSola (NYSE: SOL )
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381.8%
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****
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Sigma Designs (Nasdaq: SIGM )
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61%
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*****
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Activision Blizzard (Nasdaq: ATVI )
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32.6%
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*****
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Data and star rankings from CAPS as of June 30.
ReneSola
ReneSola has traditionally been at the front of the solar food chain, supplying silicon wafers that companies like Suntech Power (NYSE: STP ) and JA Solar (Nasdaq: JASO ) use to make solar cells. But the firm is making a big move into module manufacturing with the acquisition of smaller Chinese firm JC Solar; it's even laid out an ambitious goal of 1 gigawatt of module capacity in the next three years. ReneSola has big plans to expand its global customer base and expects the integration to help it gain market share as it benefits from its competitive costs and increased capacity.
Despite a hit to revenue in its most recent quarter, the company managed to reduce production costs and generated positive operating cash flows. Despite the risks of vertical integration, many investors think RenaSola will be successful, as nearly 98% of the 955 CAPS members rating ReneSola remain bullish on the stock.
Sigma Designs
While it does churn out some impressive growth, Sigma Designs also benefits from serving some relatively stable markets -- the firm works with companies like Microsoft (Nasdaq: MSFT ) and Cisco Systems (Nasdaq: CSCO ) to provide technologies for various home entertainment devices like media players and IPTV boxes. While sales were down in the first quarter, its leadership in these markets is helping it get through a tough economic time. Many CAPS members like the company’s ironclad balance sheet and free cash flow generating abilities and also see much more opportunity in the future of digital entertainment. At this point, more than 97% of the 1,529 CAPS members rating Sigma Designs expect it to outperform the market.
Activision Blizzard
A recent PricewaterhouseCoopers report believes the video game industry to be one of the fastest growing forms of entertainment, with global sales reaching $68.4 billion in 2012, up from $41.9 billion in 2007. And it predicts online game sales will more than double to $14.4 billion in 2012 from 2007. Activision Blizzard is sitting in a figurative catbird seat, owning the top online game, World of Warcraft, with more than 11.5 million subscribers willing to pay to play the game. It also has the hit Guitar Hero franchise, for game consoles like Microsoft's Xbox and Sony’s PS3, which it is looking to leverage. And it has several games with large profit potential set to release this year and next, which are sequels to already-popular hits. With all the good fun brewing, nearly 98% of the 4,242 CAPS members rating Activision Blizzard expect it to beat the market in the future.
Let 135,000 members be the jury
The collective wisdom of a huge pool of investors can help give context to a page of numbers from a stock screen -- but individual investors are still the best judges. Fools should always perform their own due diligence.
Run your favorite factors through the Motley Fool CAPS screener. It's totally free, and we think you'll like the results.
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