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 160,000-strong CAPS community -- where members give the thumbs-up or thumbs-down to some 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.

A tall drink of water
Has the decline of the DVD finally arrived? Movie rental giant Netflix has dominated the format and is pushing Blockbuster (NYSE: BBI) to the brink of bankruptcy, but the end of DVDs may be in sight. In its recent earnings report, sound specialist Dolby Labs (NYSE: DLB), which has always counted on DVD player sales for a significant portion of its revenues, reported that DVD sales diminished in the first fiscal quarter, something that Blu-ray player sales couldn't offset.

Fortunately for Netflix and Dolby investors, both companies have moved aggressively into other technologies to expand their markets. CAPS member shredswithpiks says that the movie rental king will be able to dominate here as well:

In the long term, digital subscription distribution of TV and movies will take over traditional cable, satellite, and physical media. Netflix is the obvious leader in this market. They've grown huge in the past 10 years, but there is still growth to be had.

A slick deal
Coffee giant Starbucks is another brand that's needed to find avenues of expansion beyond its traditional market. Right or wrong, the perception remains that the coffee shop is home to overpriced brews, and Green Mountain Coffee Roasters (Nasdaq: GMCR) is but one rival offering consumers a means of getting a less-expensive premium cuppa joe. Highly rated CAPS All-Star Jeffreyw thinks Starbucks is successfully repositioning itself so that years from now it will still possess a potent presence:

Still trying to find success beyond the premium coffee and cappucino, expended by purchasing Seattle's Best, and introducing instant coffee for our on-the-go society. Pricing power is still there and better contracts from suppliers will see this blue chip still doing well 50 years from now.

Put that in your pipe
Johnson & Johnson has a deep, diverse product lineup covering pharmaceuticals, medical supplies, and consumer products generating strong cash flows that enable it to pay a healthy dividend that currently yields 3%.

Medical devices make up more than a third of JNJ's revenues and the stent market is just one area that looks to be heating up, with Boston Scientific (NYSE: BSX) hoping the latest version of its drug-eluting Taxus stent will enable it to gain share from Johnson & Johnson and other rivals.

CAPS member GingersBread says the combination of product, pipeline, and balance sheet strength makes it a virtual recession-proof stock that ought to be high on any investor's short list of stocks:

Global medical supplies and pharmaceutical company with a strong and growing presence in emerging markets. Margins support consistent dividend payouts and increases, company is recession-resistant, and increased incomes in third world should increase health expenditures.

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 for growth. 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.

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