5-Star Recycling Stocks Ready to Rocket

Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, these two recycling stocks have achieved a coveted five-star ranking, our highest rating.

CAPS contains more than just the crowd's opinions. Its best-performing members' votes count more in shaping each company's rating than do the picks of their poorer-performing peers. That way, investors can intelligently use the collective wisdom of more than 165,000 CAPS members to make better decisions.

With that in mind, let's take a closer look at these recyclers respective businesses.

Let's dive in
Darling International is the largest independent rendering company in the nation, and a perfect example of one person's trash being another's treasure. For those unfamiliar with the term rendering, it's not the most pleasant chore; essentially, it's a euphemism for recycling animal carcasses and other trimmings into oils, fats, and protein meal for use in animal feeds, industrial applications, and consumer products. In fact, if you've lavished yourself with luxury soaps or shaving creams, you were probably lathering on a bit of Darling's recycled beef tallow. For a deep-dive look at Darling, check out this blog post from CAPS All-Star Wax.

Sims Group is the world's largest metals recycler and the industry bellwether. It's had a tough year amid the global recession, but its prospects may be starting to turn around. In its third-quarter conference call, CEO Daniel W. Dienst noted, "While scrap intake increased by only three percent as compared to the second quarter, we are seeing significantly improved scrap flows in our fourth quarter, particularly in North America."

Dienst continued: "We are encouraged by our third-quarter results and have built momentum heading into the close of our fiscal 2010. The cost efficiencies achieved over the past 18 months have positioned Sims Metal Management to take advantage of our competitive position and will provide tremendous operating leverage as and when scrap intakes normalize."

The Foolish bottom line
Over the last year, the Market Vectors Environmental Services index (NYSE: EVX), which includes recycling stocks, has been able to generate a 32% gain, six points above the rise of the broad market. Do you think either of these five-star stocks has what it takes to continue its stellar rise, or are CAPS investors crazy? Let us know what you think in the comments box below!