High-Priced Stocks Worth Every Penny

Penny stocks are one way to double your money, though they tend to be 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.

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 (out of 5)

3-Digit Price

Return on Capital, TTM

Credicorp (NYSE: BAP  )

**

$119.36

NA

Great Northern Iron Ore Properties (NYSE: GNI  )

*

$137.20

83.6%

ProShares Ultra Silver (NYSE: AGQ  )

*

$152.30

NA

Source: CapitalIQ, a division of Standard & Poor's; Motley Fool CAPS.

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 launch pad for your own research and analysis.

Highfalutin' honeys
When investors discuss potential investments in Latin America, they're more than likely to focus on Brazil. That makes sense; it is the largest economy in South America, and it wants to be the fifth largest in the world by 2016. Brazil recently just supplanted Canada and Spain in the No. 8 spot on the list of biggest economies.

Yet by focusing on Brazil, you'd ignore rich opportunities elsewhere in South America. Consider Peru, where Credicorp is the country's largest financial services company. Operating in relative security like that -- only a handful of analysts cover it -- its shares have soared 60% year over year, compared to a 34% decline by better-known Spanish institution Banco Santander (NYSE: STD  ) , or Lloyd's Banking Group (NYSE: LYG  ) , which is up 28%.

With Peru's economy expected to close 2010 with 8.6% growth, ahead of Brazil at 7.7%, investors may want to pay closer attention to the country. Some 91% of the more than 200 CAPS members rating Credicorp have indicated that they believe it will outperform the broad market averages.

You can let us know in the comments section below or on the Credicorp CAPS page whether it's worth depositing your money in its stock.

The long count
Investors might be tempted to pursue Great Northern Iron Ore Properties' dividend, which currently yields more than 5% annually. But a big risk accompanies that payout; the trust will be dissolved in less than five year's time.

When it was founded in 1906, the agreement said the trust would last for 20 years after the death of 18 heirs of the founder. That last member died on April 6, 1995, leaving the clock ticking down to 2015. An investment here is obviously not for the long term.

Mesabi Trust (NYSE: MSB  ) might be a better bet. Like Great Northern, it also derives its riches from the mining of ore in the Mesabi Iron Range. Mesabi's biggest stake is its Peters Lease, which runs until there's no more ore to be mined, and which should last appreciably longer than five years. A second smaller lease, the Cloquet, ends in 2040.

CAPS member pchop123 admits that Great Northern's yield is nice, but with the deathwatch set in motion, there's little to recommend it as an investment.

Triple-digit titans
Since this is the last week of 2010, it's often a time for investors to engage in reflection and introspection on their successes and failures. Sometimes we find nuggets of gold tucked away in such reviews; while that can happen figuratively, you could be forgiven for thinking it might happen literally, too, with the precious metal trading at record levels.

But you might be surprised to learn that gold's cousin silver was really the one to watch this year. ProShares Ultra Silver was the top-performing exchange-traded fund in 2010, returning 170% to investors. In fact, silver ETFs filled out four of the top six slots, with nary a sign of gold. The iShares Silver Trust (NYSE: SLV  ) came in third.

That could mean the easy money's been made in silver, and that 2011 might not be so generous. CAPS member FredTCI disagrees, believing it's worth "ratcheting up the risk" a little to add even more overall value to your portfolio:

If we look at what the emerging markets (China, etc.) it will take hard commodities like minerals to accommodate the rise in the spending of their middle class. We seem to accept that idea with respect to oil but refuse to accept that the same concept applies to almost all mineral based commodities too!

You can tell us on the ProShares Ultra Silver CAPS page whether gold's gray cousin still has more room to run.

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.

Berkshire Hathaway is a Motley Fool Inside Value selection and a Motley Fool Stock Advisor pick. The Fool owns shares of Berkshire Hathaway. 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 owns shares of Lloyd's Banking Group but does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.


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