Stocks climbing to 10 times their original price are rare breeds -- but they're not impossible to find. Especially when you have Fools for friends.
The market's best stocks include companies that have risen dozens of times in value by taking advantage of the market's weaknesses. These aren't penny stocks; they're viable companies with sound business prospects that are achieving phenomenal returns. Finding just one or two of these monstrously successful companies can help you establish a winning portfolio.
Stalking the monster
To find tomorrow's winners, we've enlisted the help of more than 165,000 monster trackers at Motley Fool CAPS. We've compiled a list of the most successful CAPS members, dubbed All-Stars, whose picks have doubled, tripled, or even quadrupled in price. Then we've plucked out some of their recent picks for stocks they find equally promising.
Score is how many percentage points that pick is beating the S&P 500.
Of course, this is not a list of stocks to buy -- or, for those monster stocks that our CAPS All-Stars have already found, sell. Just consider them starting points for your own further research of extreme buying opportunities.
In search of Bigfoot
It's a common enough refrain among biotech investors that they should be steeled for the possibility: Their lead drug heads into trials only to emerge failing to meet end goals. Affymax suffered that fate when its anemia drug candidate Hematide showed a higher rate of death and stroke in patients, ending whatever chance it seemed to hold for taking on Amgen's (Nasdaq: AMGN ) Epogen and Aranesp. Its stock was naturally sent into a tailspin.
Although CAPS member punchy22 says "this company is dead," All-Star member and biotech guru zzlangerhans sees the severity of the haircut it got putting it back in balance with its cash on hand, even though he doesn't recommend blindly buying into stocks that suffer such cataclysmic declines.
Despite the sudden appearance of a juicy buy-in price, these meltdowns require just as much if not more due diligence as any other biotech stock purchase. Look at what happened to Poniard, Medivation, Acura, and [InterMune (Nasdaq: ITMN ) ] share prices after their respective blowouts this year.
Corn prices have found some strength lately, rising to around $3.80 a bushel, but they're still well below the January peak of $4.25 and last summer's $4.40 highs. With Congress pushing the EPA to adopt higher levels of ethanol in gasoline, raising it to 15% from the current 10% level, that bodes well for higher prices down the road. The Agriculture Department estimates that with corn producers not being able to keep up with demand from exporters, farmers, and ethanol producers, U.S. supplies will sink 8% this year and 12% next year.
Look for producers like Archer Daniels Midland to bounce back, as it recently opened an ethanol plant in Nebraska, while food companies like Kellogg (NYSE: K ) and General Mills (NYSE: GIS ) feel the pinch. It won't be so special because it will also likely open the food-for-fuel debate as costs rise around the world for basic foodstuffs. They got caught last year in the vice between rising costs and passing them along to consumers.
With 93% of CAPS members rating ADM to outperform the broad market averages, it seems safe to say they're looking for a bumper crop in higher corn prices.
Burning the midnight oil
With its acquisition of Midnight Oil Exploration, midstream natural gas liquids play Provident Energy Trust will transform itself into the leading Canadian pure play here and will rechristen itself Pace Oil & Gas on the Toronto Stock Exchange. Provident will still trade as it does here on the NYSE.
With its dividend currently yielding 9.5%, CAPS member arney1492 finds Provident a sure bet as oil prices resume their upward trajectory: "Can't beat the dividend and oil prices will go higher above the current $70 level."
It just might take a little while as Iran, the second-largest Middle Eastern oil producer, dumped onto the market 40% of the oil it had stored in tankers. Oil, though, trades around the $76 level right now, so it is elevated regardless.
A chance for scary growth
It takes more than a few All-Star picks and a quick pitch to make buy or sell decisions, so start your own research on these stocks on Motley Fool CAPS and find other opportunities with monster potential.
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