Drink In These 5 Top Stocks

Whether it's the corporate lunchroom, your cubicle, or the local watering hole after work, there are regular places we gather to discuss news, sports, or -- if you're like us -- stocks. Here at Motley Fool CAPS, we gather around the virtual water cooler daily to rate stocks and delve into their merits as investments.

Our 145,000-strong CAPS community -- where members give the thumbs-up or thumbs-down to nearly 5,400 stocks -- seeks businesses it thinks will outperform the market. Below, we'll take a look at some of the most popular and talked-about stocks in the CAPS universe, and examine whether you think they'll continue their winning ways.

Stock

CAPS Rating
(out of 5)

Number of Calls

% Outperform Calls

Chemical & Mining Co. of Chile (NYSE: SQM  )

*****

1,187

97.6%

InterDigital (Nasdaq: IDCC  )

****

1,142

95.8%

Raytheon (NYSE: RTN  )

****

1,184

95.2%

TASER International (Nasdaq: TASR  )

***

1,140

92.7%

UltraShort QQQ ProShares (NYSE: QID  )

*

1,140

69.2%

A tall drink of water
You knew it had to happen. TASER stun guns are going designer, with everything from "red hot red" to leopard print. Carrying around the more industrial-looking versions used by the police just isn't the right fashion statement, I guess. Then there's a new holster for the stun gun with a built-in MP3 player. So you can take down the would-be mugger while still thrashing your head to the latest speed metal riff. I actually like these ideas because they should help make the product more accessible to the public and bring in incremental revenues.

What I'm not so sure about is TASER's foray into texting. Or the monitoring of texting, anyway. With TASER's new Protector service, calls, texts, emails, and photos that would be sent to your child's phone would be routed to your phone for preview first.

What worries me is TASER venturing off into a new line of business. (There is no stun or shock involved in the preview service.) New ventures like this, even if they seemingly have a lot of value to them, hold risks for companies that try them.

I much prefer it when companies stick to their knitting, but other investors seem unconcerned. CAPS member mac07 views the Protector service as a potential new source of revenue, while alars79 thinks the traditional line of business will continue to hold up well.

[Dominant] player in the ECD market. Solid cash position and no debt. Has had consistent revenues during the Great Recession. With continued terrorism fears, this type of weapon seems to make sense for on-board security personnel. Tase me bro!

Personal protection has been a big factor for people during this recession and has helped fuel the rise of shares in handgun manufacturers like Smith & Wesson Holding (Nasdaq: SWHC  ) . TASER could join that group if its designer collection catches on.

Getting static
Even the most avid advocate of InterDigital had to admit that losing the patent case with Nokia (NYSE: NOK  ) was a blow, despite management saying those patents represented but a small portion of its licensing program. The stock was hit hard in the aftermath, but since then it has staged a nice rebound.

It seems the market initially felt that if InterDigital lost Nokia, then it would lose everything. Why would Samsung sign up again if it could be shown that there were workarounds? Why would anyone? The fact is, InterDigital has a portfolio that remains intact, something the International Trade Commission said when it found the patents valid. So companies won't simply be able to avoid the issue, and with new opportunities abounding in 3G and 4G networks, the company could still dial up some sweet profits.

Investors also remain confident, with CAPS member danpuperi finding InterDigital's cash position and otherwise solid financials attractive.

Financials look solid – low debt, strong cash and positive cash flow, high profit margin. Growing company with stable EPS growth and good growth predicted for next year. Lots of share buybacks for the past 5 years. Really nothing negative to say. Only downside is that it is a little expensive at about $27. [Trailing 12 months] P/E is 22.30 and average of last 3 years P/E is 16.08 (because of unusually strong 2006).

Just shy of 1,100 CAPS members have rated the wireless technology company to outperform the market, so why not join them on the InterDigital CAPS page to sound off on whether it has what it takes?

Gather 'round
With so many good opinions about today's top companies, why not grab a pointy paper cup from the dispenser and join us at the Motley Fool CAPS watercooler? Your input can help guide other investors to stocks with bright prospects. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page.

Sign up today for the completely free service and let us hear what you have to say about the great and almost-great companies that interest you.

Nokia is a Motley Fool Inside Value pick and InterDigital is a Stock Advisor selection.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.


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