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 165,000-member community is full of investors helping each other beat the market.
We'll enlist CAPS to screen for Internet companies and 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 long term debt-to-equity ratio of less than 0.5.
- A gross margin of at least 50%.
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 |
Gross Margin |
CAPS Rating (out of 5) |
---|---|---|
Zix |
76.7% |
**** |
Sina |
56.7% |
**** |
Google |
68.9% |
*** |
Data and star rankings from CAPS as of May 21.
Zix
Zix made the choice late last year to wind down the e-Prescribing business, leaving the company focused now on email encryption solutions, where business has been good. In the first quarter, new orders nearly doubled and the segment posted its highest ever quarterly revenue. Zix expects the strength to continue and remains optimistic about its distribution partners, such as Symantec
Sina
As the leader in China's portal advertising market, some CAPS members like Sina as a way to play the growing Chinese Internet market. The company has been taking advantage of a recovering ad market there, which helped it blow past first-quarter expectations and forecast a strong second quarter as well. The recovering market has one Brean Murray analyst starting off with bullish coverage on the company, and the growth prospects in front of Sina were enough for CAPS members to bump up its rating to four stars. Overall, 93% of the 771 CAPS members weighing in on Sina believe it will be a market-beating investment.
Google
Google's share of the search market continues to hold strong and fend off the threats coming from distant competitors such as Yahoo!
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 if you see more of a nightmare instead -- simply scroll down and add your thoughts in the comments box.
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