Tomorrow's Monster Stock?

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, achieving phenomenal returns. Finding just one or two of these monstrously successful firms 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
Buy and selling mortgage-backed securities sounds like it would be a risky business these days, but Annaly Capital Management has found a way to make the business less perilous for its bottom line: transfer the risk to the taxpayer. The REIT's portfolios are filled primarily with assets guaranteed by Fannie Mae and Freddie Mac, so that the risks those institutions merrily accrue don't fall back to Annaly.

Investors in the REIT are enjoying the benefits that rebound to them, such as juicy dividends (Annaly is currently yielding 15.5%) and a historically huge interest rate spread of more than 2%, with sufficient assets to cushion any blow. Those same factors have attracted investors to Annaly's offspring, Chimera Investment (NYSE: CIM).

Yet if it was so easy to make money this way, everyone would be doing it. Just because it's lowered its risk profile doesn't mean Annaly doesn't have any risk. Those historically high spreads are due for contraction, and proprietary trading desks caused Lehman and Bear Stearns to run aground, even if Annaly isn't in the same camp as Goldman Sachs (NYSE: GS).

When it comes down to it, though, most investors will peg Annaly as a conservatively run business, as CAPS member OtterPater and dbb032 did, with a divine dividend that eases any remaining risk worries.

Burning the midnight oil
Forget the Baltic Dry Index if you're looking to set sail with dry bulk shippers like DryShips. While the measure of global shipping rates is an important barometer, it's not the only one. Many analysts are now coming around to the belief that vessel inventory can be just as powerful an indicator of whether DryShips, Paragon Shipping (Nasdaq: PRGN), or Eagle Bulk Shipping (Nasdaq: EGLE) will do well or not going forward.

There are definitely other reasons to be cautious about shippers -- China trying to cool its economy, financial chaos in Europe, intractable unemployment here at home -- but the BDI is no longer the be-all-and-end-all yardstick for measuring how well DryShips and other bulk shippers will perform. Even with the market up 13% over the past year, the CAPS Dry Bulk Shipping sector is down 5% and DryShips is off 34%. That disparity in results is why goduwinravi thinks DryShips is a long-term winner:

This stock has fallen too much when compared to S&P and unless it goes out of business it is expected to see a big correction. Bad news about euro zone or greece will last only for so long and reversal is a clear possibility.

Getting static
Sirius XM Radio is about to prove me wrong ... again! A few years ago, I penned an article that essentially said satellite radio would fail because it was becoming too much like terrestrial radio. Moreover, I thought XM had Sirius beat, but that ultimately the format wouldn't survive.

However, as Sirius closes in on 20 million subscribers and boosts its expectations for growth higher still, the future of satellite radio isn't looking quite so glum anymore. Sure, there are threats like Pandora; its marquee name Howard Stern may retire; and its financial situation remains uneven. But it doesn't seem like satellite radio is about to lose its orbit.

CAPS All-Star JPDemers looks to car sales as a continuing source of new subscribers:

As new car sales are made, new customers are made. That's a one-way street, and the stock is currently about as cheap as it's going to get.

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.