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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 firms 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.
Recent Stock Pick
|bbmaven||99.99||Fossil||149.02||Lumber Liquidators (NYSE: LL )||****|
|chk999||99.99||Chinalco||105.66||Starbucks (Nasdaq: SBUX )||**|
|BravoBevo||99.99||Aegon||146.71||Telestone Technologies (Nasdaq: TSTC )||***|
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
Having installed four laminate floors for family and friends over the past few months, I've grown to really appreciate Lumber Liquidators. Friendly, helpful staff; excellent selection; even better prices. Despite lumber prices' being at their highest level since 2006 and despite being in the midst of the housing bust that saw record numbers of foreclosures, Lumber Liquidators has been able to grow net sales at a fairly robust pace.
Equally important, its position as the low-cost operator in the industry has allowed it to horn in on sales that would otherwise have gone to Lowe's (NYSE: LOW ) or Home Depot (NYSE: HD ) . It's also increased the number of stores it runs without cannibalizing sales at existing units. Comps for the third quarter were up more than 7% compared to a less than 2% increase a year ago, and it's grown store count by 35.
It helps explain why CAPS member Reddrummer wouldn't want to go into business against the company: "Good niche, dealing directly with wholesalers gives them a distinct cost advantage so they can undercut their competition. Wouldn't want to compete with them."
Add Lumber Liquidators to your watchlist and have all the Foolish news and analysis aggregated for you in a single place.
A gold standard
I don't think Starbucks can be like Nike (NYSE: NKE ) and eliminate its name from its logo and hope to grow. While the sneaker maker's famous "swoosh" clearly identifies its products without having to name names, Nike also spends more than $2.5 billion on advertising to support it. With an annual advertising budget of less than $180 million, Starbucks' decision to wipe the word Starbucks from its logo (and the word "coffee," too!) seems like a misguided effort. Maybe it wants to be like Madonna or Cher, but it might instead end up the next Hammer or Morrissey. Who? Exactly!
My Foolish colleague Alyce Lomax recently noted that some people think Starbucks' expansion plans into India might have something to do with this change, but McDonald's didn't eliminate its name and go with just the golden arches when it expanded into China, nor did Burger King drop its name when it entered Russia.
While some think the change will bring new business, others think Starbucks should have learned from its last attempt to open stealth cafes. Still, CAPS member hcve apparently doesn't think it matters one way or the other since it will be entering one of the world's biggest markets:
Thursday 10:38 AM Starbucks (SBUX) unveils an alliance with India's Tata Coffee for the U.S. chain to open stores in the subcontinent. India has been one of the big untapped markets for Starbucks, and CEO Howard Schultz says it could eventually rival China, where the company recently revealed plans to more than triple the number of outlets to 1,500 in five years.
Let us know on the Starbucks CAPS page or in the comments section below whether the coffee slinger should go undercover or be out loud and proud.
Telestone Technologies is the latest Chinese small cap facing allegations of financial mismanagement. It's up to regulators and lawyers to determine what's actually going on -- and trial lawyers have jumped into the fray -- but there's an awful lot in Telestone's financial reports to leave you scratching your head.
CAPS members have been skeptical about a number of actions Telestone has taken, even when it appeared sales were growing spectacularly. The huge share dilution it initiated last month did not sit well with them at all, and raised flags among many.
Despite impressive revenue and earnings growth the company actually has negative cash flow for it's entire public life and accounts receivable has grown to 30% more than TTM revenues. There's plenty more to cringe about in the articled linked above.
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.