Penny stocks are one way to double your money, though it's fraught with risk, but there are equally shiny opportunities trading at the other end of the price spectrum, too. I call 'em "three-digit stocks," yet if they're anything like Berkshire Hathaway they can trade in the four-, five-, and six-digit range, too.
A penny stock might not be a good buy simply because it's cheap, and a three-digit stock shouldn't scare you away just because it carries a hefty price tag. Handsome is as handsome does. Let's check in with the Motley Fool CAPS community to see which of the high-priced stocks below earn the greatest confidence from our investor-intelligence database:
Stock |
CAPS Rating
|
3-Digit Price |
Return on Capital, TTM |
---|---|---|---|
Eaton |
**** |
$101.03 |
6.6% |
Seaboard |
***** |
$1,999.88 |
7.9% |
White Mountains Insurance |
***** |
$329.70 |
2.8% |
Source: Capital IQ, a division of Standard & Poor's; Motley Fool CAPS. TTM = trailing 12 months.
But just because these stocks are purring is no reason to jump into them blindly. Catching a tiger by the tail -- or a knife falling from on high -- can end up leaving you scratched and bleeding. That's why we recommend you use this list as a launching pad for your own research and analysis.
Highfalutin'
There was a lot of fanfare a year ago when consumer electronics chain Best Buy
Now we see that the place you go to buy your big-screen TVs and stereo equipment is teaming up with both Eaton and Mitsubishi to bring those electric cars to life. It's going to provide the geeks to do consumer site assessments while Mitsubishi builds the cars and Eaton provides the charging stations available for purchase at Best Buy.
We've seen this dynamic before, as Clean Energy Fuels
Eaton's energy efficiency attracted CAPS member coopecb1, who isn't alone because 96% of CAPS members rating the diversified automotive components maker also see it outperforming the broad market averages. You can let us know what you think in the comments section below or on the Eaton CAPS page.
Bringing home the bacon
Although sales of commodities like wheat, corn, soybean meal, and rice make up more than 40% of Seaboard's revenues, it is pork (at less than one-third of sales) that gave it the bulk of its profits over the past nine months. With its purchase of Butterball from Smithfield Foods, it will also talk turkey, too.
Seaboard, Smithfield, and even Tyson
Because Seaboard trades at just 12 times trailing earnings, CAPS All-Star whomonkyoulus thinks it offers an even better discount.
This will be a great company to own. Current assets minus current liabilities = 1 billion. They are trading for 2.3 billion. They are making 250 million a year. One could argue that the P/E is now 5.
To keep an eye on Seaboard, add it to your watchlist to have all the Foolish news and analysis compiled for you in a single place.
Triple-digit titans
Following the devastating hurricanes in 2005, insurance companies like White Mountains Insurance and United Fire & Casualty were brought to the brink as claims swamped their ability to pay. While that had some thinking the industry would be ruined, it actually paved the way for higher premiums. Even in 2010, one of the most active years for hurricanes on records, though none of them made landfall in the U.S., the insurance market is soft. Competition and a still-difficult economy have kept premiums stable.
As a result, investors are fairly sanguine about insurers, and many, including White Mountains, are trading for less than their book value. Because 95% of those in CAPS rating the insurer see it turning in market-beating performances, it would suggest they think White Mountains still has the wind at its back.
You can tell us what you think on the White Mountains CAPS page.
Count to 10
These three-digit stocks might be on their way to even higher valuations. That's why it pays to start your own research in Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page.