Dream Stocks for Tech Investors

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 170,000-member community is full of investors helping each other beat the market.

We'll enlist CAPS to screen for technology companies, 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 three year revenue growth rate of at least 20%.
  • A price-to-earnings ratio of less than 25.

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)

GT Solar (Nasdaq: SOLR  )

85.5%

***

CenturyLink (NYSE: CTL  )

32.5%

***

MetroPCS (NYSE: PCS  )

20.5%

***

Source: Motley Fool CAPS as of Sept. 24.

GT Solar
Investors liked what they saw in GT Solar's fiscal first-quarter earnings release a couple of months ago as the solar equipment maker blew past Wall Street's expectations. Similar to the strong demand for solar equipment that peer Applied Materials (Nasdaq: AMAT  ) has seen in its energy and environmental solutions segment, GT Solar's revenue jumped 88%. And the purchase of sapphire substrates maker Crystal Systems builds its position in the growing LED industry: one that's been booming for Veeco Instruments (Nasdaq: VECO  ) lately. With a strong balance sheet and a building position in growing industries, a good number of CAPS members like the potential of the company as 90% of the 381 members rating GT Solar expect it to outperform the broader market.   

CenturyLink
Some CAPS members like the stronger competitive position CenturyLink will hold in going up against giants like AT&T and Verizon (NYSE: VZ  ) following its pending merger with Qwest (NYSE: Q  ) . Shareholders of both companies have given the go-ahead for the deal, and the companies are making progress in gaining state regulators' approval. And CenturyLink's previous acquisition of Embarq is already paying off -- the deal has generated costs savings faster than expected and helped revenue almost triple in the second quarter. Its growth by acquisition and solid dividend has many CAPS members liking where it's headed and 92% of the 377 members rating CenturyLink in CAPS see it as a market-beating investment.

MetroPCS
While competitor Leap Wireless saw falling subscriber numbers in the second quarter, prepaid wireless provider MetroPCS added more than 300,000 net subscribers. And CAPS members like its ambitions to capture a larger piece of the wireless market. In an effort to move in to the higher-end portion of the market, MetroPCS began selling more premium devices like BlackBerrys this year and is leading the charge in unleashing long-term evolution (LTE) 4G wireless technology ahead of competitors like Verizon Wireless. With LTE live in Las Vegas and expected to be active across its entire network by January, more potential customers may be drawn to its service, which could continue to strengthen its bottom line. In CAPS, 92% of the 393 members rating MetroPCS are bullish on its chances to outpace the S&P.

Let 170,000 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.

Always looking ahead, the Motley Fool Rule Breakers service is picking the next generations' big winners today. To see what rule-breaking stocks David Gardner is recommending now, take a free 30-day trial.

Fool contributor Dave Mock dreams of stocks and sugarplum fairies, but not together. He owns no shares of companies mentioned here.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool's disclosure policy screens the good, the bad and the ugly.


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