Investors are always on the lookout for the next big stock -- the dream stock whose price soars 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 dig up and evaluate tomorrow's greatest companies.
Motley Fool CAPS offers a variety of resources to aid Fools in finding tomorrow's leaders. Our 160,000-member community is full of investors helping each other beat the market.
We'll enlist CAPS to screen for energy-related firms, 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.
|
Company
|
Revenue Growth Rate,
Past 3 Years
|
CAPS Rating
(out of 5)
|
|
Enterprise Products Partners (NYSE: EPD )
|
22.2%
|
*****
|
|
NuStar Energy (NYSE: NS )
|
51.8%
|
****
|
|
Diamond Offshore Drilling (NYSE: DO )
|
16.9%
|
****
|
Data and star rankings from CAPS as of May 14.
Enterprise Products Partners
In addition to its tendency to hike dividend payments, investors like Enterprise Products Partners' solid presence in natural gas transportation and storage. The company put up some big growth numbers in the first quarter including record volumes in its natural gas pipeline systems and a 68% jump in net income. The $3.3 billion merger with Teppco Partners also makes it one of the country's biggest pipeline companies and many CAPS members like its strategic position in a growing energy market. As such, about 98% of the 981 CAPS members rating Enterprise Products Partners see it beating the broader market.
NuStar Energy
NuStar reported weak earnings in the first quarter, similar to some of the refiners like Tesoro (NYSE: TSO ) and Valero (NYSE: VLO ) that several of NuStar's pipelines are dependent on. But Tesoro and Valero have seen a pickup in gasoline demand, and NuStar expects improving financials for the rest of the year. It's been seeing increased demand for refined products driven by improvement in the economy, which could lead to higher volumes in its transportation segment. And the company is bullish on its other segments, such as asphalt, as well.
With well-positioned assets and a healthy dividend, a good portion of CAPS members like the long-term potential of the company, with 95% of the 331 members rating NuStar Energy a market-beating investment.
Diamond Offshore Drilling
The Deepwater Horizon disaster in the Gulf of Mexico is expected to cost Transocean and BP some serious money, and its aftershocks could potentially pose significant risk to Diamond Offshore and other companies with interests in the Gulf -- a halt in drilling permits would affect all of the above.
Diamond Offshore's shares have taken a hit in recent weeks along with others in the industry, but many CAPS members remain bullish and see the company maintaining a strong long-term position in the Gulf region as well as in other parts of the world. Despite a cut to its special dividend, the company is hoping the extra money in its coffers will give it the capital backing needed for any potential acquisition opportunities of more rigs.
In CAPS, an overwhelming 1,832 of the 1,873 members rating Diamond Offshore Drilling still expect it to outperform the broader market.
Let 160,000 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 below.
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