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 145,000-member community is full of investors helping each other beat the market.
We'll enlist CAPS to screen for biotech companies, then get the story behind some of its more highly rated stocks. CAPS' nifty screener will help us find stocks with:
- A market cap of at least $100 million
- A three year revenue growth rate of at least 25%
- A price-to-earnings ratio of less than 25
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.
Company |
Revenue Growth Rate, Past 3 Years |
CAPS Rating (Out of 5) |
---|---|---|
ISTA Pharmaceuticals |
46.7% |
***** |
China-Biotics |
31.5% |
***** |
Myriad Genetics |
38.1% |
**** |
Data and star rankings from CAPS as of Nov. 20.
ISTA Pharmaceuticals
Small-cap ISTA Pharmaceuticals competes in the ophthalmic product market against larger peers like Allergan, Alcon, and Novartis
China-Biotics
While just a fraction of the size of large biotechs such as Celgene
Myriad Genetics
Although Myriad Genetics' recent quarterly earnings didn't top analyst estimates like they did last quarter, it still pulled in 22% higher revenue from molecular diagnostics in its fiscal first quarter with earnings that doubled over last year. The weak economy has been weighing on sales of its diagnostic tests, but it's been seeing stronger demand lately. It spun off its drug business Myriad Pharmaceuticals recently, leaving it more focused on diagnostics compared with others like Genzyme
Let 145,000 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 of what to do with their own money. Fools should always perform their own due diligence.
Happily, it's easy to chime in with your own opinion. If you agree that these companies present dream opportunities -- or see more of a nightmare instead -- simply scroll down and add your thoughts in the comments box.