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 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 170,000 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.

Player

CAPS Member Rating

Monster Stock

CAPS Score

Recent Stock Pick

CAPS Rating (out of 5)

haydoniv

99.34

Health Management Associates

395.25

EnergySolutions (NYSE: ES  )

*****

darkknight266

95.64

Allied Nevada Gold

337.59

Northgate Minerals (NYSE: NXG  )

*****

Predaking

99.21

Tata Motors

559.86

Rediff.com India (Nasdaq: REDF  )

**

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
Nuclear power is key not only to our country's future, but to EnergySolutions' as well, and how well the industry thrives will indicate how it does. It derives 100% of its revenues by providing services to the industry, but what's equally important is that virtually every company and organization with a nuclear license uses its services. To say that the two are inextricably linked is an understatement.

Not that it doesn't have competition. While investors might primarily think of Jacobs Engineering (NYSE: JEC  ) or Fluor (NYSE: FLR  ) as engineering and construction companies that build nuclear reactors, they also have divisions that handle nuclear waste remediation. But because EnergySolutions has extensive nuclear waste processing clients here and abroad, it is the leading name in the niche.

Because it is a player that's relatively hidden, it remains undiscovered by investors at large, which CAPS member Clint35 sees as a plus: "Small and cheap. Pays a dividend. Not much competition to worry about."

You can just click to add it to your watchlist and have all the Foolish news and analysis aggregated for you in a single place.

A gold standard
It hasn't hurt gold miners that China has been buying gold hand over fist this year. Its imports jumped 500% over 2009 levels, but because it's also a huge buyer of U.S. treasuries, it hasn't exactly been making that activity front-page news. Causing a gold rush would hurt another key component of its portfolio.

Investors there, however, are buying up gold to hedge against rising inflation, which rose 4.4% in October and represents the fastest increase in two years. Yet as gold has run up in value, so have the miners. Northgate Minerals' Young-Davidson mine, for example, has a present value far in excess of what it paid for it in 2005 primarily because of the tripling in price of gold over that time, which helps make it a more valuable investment than peers like Aurizon Mines.

CAPS member jsvarrer says other than silver, gold is one of the hottest commodities around now, meaning that Northgate looks very attractive:

This stock has not enjoyed the recent boost in its price so I think there is definitely room to run in the weeks to come. Gold and copper -- is there anything more HOT in these QE times (expect for maybe silver) ?!

Let us know on the Northgate Minerals CAPS page whether having a golden divining rod makes for a good investment.

Inflating values
Although China grabs the headlines from India, the subcontinent is perhaps the best investment opportunity still out there. Economist Nouriel Roubini certainly thinks that over the next decade the country may even surpass China.

It was the growth of Internet portals Baidu.com (Nasdaq: BIDU  ) and SINA.com (Nasdaq: SINA  ) that heralded the emergence of China as a world economy, and Rediff.com India may similarly signal India's growth as well. There are challenges to that happening, though. In a country that has 700 million mobile phone users, there are only 10.3 million broadband connections.

But India is making an investment now to boost that number to 75 million by 2012 and 160 million by 2014, which would give the Indian portal a preeminent position. It's that projected penetration that has CAPS member teamonfuego expecting Rediff to prove that its current valuation is exceptionally cheap:

This will significantly outperform the S&P. Internet penetration is very low in India; however, the recent broadband spectrum auction will bring Internet to the masses. Currently only 9 million people have access to broadband Internet in India versus 1.2 BILLION people. REDF is the 10th most trafficked site in India. While they aren't the leader, the 10th most trafficked site in India with huge growth staring right at them in the future should make for a valuation far north of the current $110 Million.

I've marked the portal to outperform on my CAPS scorecard, but you can add your own opinion on the Rediff.com India CAPS page.

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.

Baidu is a Motley Fool Rule Breakers pick. SINA is a Motley Fool Stock Advisor recommendation. The Fool owns shares of EnergySolutions and Northgate Minerals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Rich Duprey does not own any stocks of the stocks mention in this article. You can see his portfolio here. The Motley Fool has a disclosure policy.


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