Top-Rated Stocks Blowing the Doors Off This Market

• Email
• Share
• Print

No one has perfect foresight, but let's be honest: The market is full of people who, as Oscar Wilde would say, know "the price of everything and the value of nothing." Far too often -- over the past year especially -- investors have been pitched sensational stock recommendations, only to be left high and dry as shares crumble.

To hunt down top-recommended stocks that have been rewarding investors accordingly, I summoned our Motley Fool CAPS community to point out a few four- or five-star stocks that have been shootin' for the moon in recent months.

While not formal buy recommendations, these three-month bloomers caught my attention:

Company	13-Week Price Change	Recent Share Price	Forward P/E Ratio	CAPS Rating   (out of 5)
Allied Irish Banks (NYSE: AIB)	102%	$8.05	N/A	*****
CVS Caremark (NYSE: CVS)	24%	$36.77	12.31	****
Garmin (Nasdaq: GRMN)	55%	$32.32	14.24	****
Intuitive Surgical (Nasdaq: ISRG)	51%	$224.90	33.54	****
Boston Beer (NYSE: SAM)	41%	$39.87	20.12	****

Data from Motley Fool CAPS and Yahoo! Finance as of Aug. 31.

You can rerun the CAPS screen I used by clicking here.

A closer look at Garmin
GPS manufacturer Garmin went from a company many assumed could do no wrong to one plagued by an army of naysayers maniacally foretelling how Apple (Nasdaq: AAPL) and Research In Motion (Nasdaq: RIMM) will send it down in flames.

That may be true ... to a point. Small, portable, smartphones with ever-improving navigation functions indeed erode Garmin's once-dominant position. As CAPS member McCracker1 writes:

GPS is now commoditized. iPhones and [BlackBerry] handsets have GPS that is clean looking and easy to use. Why are people going to spend $ on Garmin's stuff? They are not, that's why. 10 million iphones a year in the US means a definite 10 million people not needing Garmin. Add the [BlackBerry] sales and the PALM Pre...forget about Garmin.

But let's look at the other side of the argument: Smartphone navigation systems are beneficial for low-key, no-need-to-be-terribly accurate, directions. Anyone with an iPhone knows that the map function, while pretty handy, isn't extraordinarily precise. It's good, just not Garmin good.

This is only important to bring up because:

• You can't navigate a plane or a boat with a smartphone.
• You can't trust a smartphone on a hike in the wilderness. Or a hunting expedition. Or a fishing outing. Or on a bicycle. Or a golf course.

Point being: Sure, Garmin isn't nearly as powerful as it was a few years ago. But rumors of its death are greatly exaggerated. Rapid, fanatical, growth might be dead; neither the company, nor any of its business units, are going anywhere.

From an investment standpoint, this becomes important when you consider shares trade for only about 14 times forward earnings, the company has zero debt, it has nearly $5 per share in cash, and it's roughly 43% owned by insiders. Not only is Garmin not about to explode, it's wonderfully run, and fairly cheap, too. As CAPS member fastfreddy7 wrote earlier this year:

Garmin has a huge balance sheet. Even if you discount property and intangibles to 0, they still have about $1.5Bill on the [balance] sheet, which is over 1/3 of their market cap. This is for a company that is still earning $150Mill a quarter, and are continuing to innovate. Their enterprise value to forward earnings ratio is in the 4-5 ratio. and they have about 40% employee ownership. everytime I look for another stock, I keep coming back to Garmin. The knock is that they will get displaced by the handset providers, but I believe that is overstated, they continue to find great markets that handsets don't fit, like running, aviation, boating, etc.

Your turn to chime in
Have your own take on Garmin? More than 140,000 investors use CAPS to share ideas and swap opinions. Check it out and speak your mind. It's 100% free to participate.

For related Foolishness:                                               

• Bargain Stocks Are Everywhere
• What You Should Fear Most Right Now
• Will Housing Bottom in ... 2011?