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 metals and mining 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.
|
Company
|
Revenue Growth Rate,
Past 3 Years
|
CAPS Rating
(out of 5)
|
|
General Steel Holdings (NYSE: GSI )
|
118.1%
|
*****
|
|
ArcelorMittal (NYSE: MT )
|
65.8%
|
*****
|
|
Mechel (NYSE: MTL )
|
36.2%
|
****
|
Data and star rankings from CAPS as of Dec. 4.
General Steel
General Steel has been a direct beneficiary of increasing steel demand in China, enough to help it post some third-quarter financial breakthroughs. It reported record quarterly revenue of $484.8 million as well as a 67% jump in shipment volume thanks to an increasing number of rural development and infrastructure products. The company also expects the volume momentum to continue as China continues to develop its second-tier cities. This solid demand outlook in China has Goldman Sachs bullish on the potential benefits for U.S. steelmakers like AK Steel (NYSE: AKS ) and Steel Dynamics (Nasdaq: STLD ) , but many CAPS members think General Steel is in an even better position to profit from domestic growth. A total of 97% of the 656 CAPS members rating General Steel expect it to outperform the market.
ArcelorMittal
Many CAPS members are looking past ArcelorMittal’s third-quarter decrease in net income and are taking a long-term view that the world’s largest steelmaker will recover strong. The company expects increasing shipments and improved average steel-selling prices in the fourth quarter. It is expected to reap rewards from the opportunity brought about by growing Chinese demand and also sees increasing opportunity in India, recently adding a third project to its list of steel plants that it plans to build there. Steel demand in India is already rising faster than previous expectations this year and could continue as the government increases infrastructure spending. In CAPS, 97% of the 1,611 members rating ArcelorMittal see it beating the broader market.
Mechel
Shares of Mechel have been regaining some ground this year after suffering a huge blow last year. The Russian company returned to profits in the second quarter after a couple of consecutive quarterly losses and said that the worst was behind its mining business. While companies such as Alpha Natural Resources (NYSE: ANR ) and Walter Energy (NYSE: WLT ) have recently seen signs of an improving coal industry, Mechel said it doubled its third-quarter coking coal production over the second quarter, and nearly all of its businesses have reached pre-crisis output volumes. Some CAPS members look for a more profitable future for Mechel and think that an improving Russian steel industry will benefit the company. As such, 96% of the 1,642 CAPS members rating Mechel have given the stock the thumbs-up to beat the S&P.
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.
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