However hard the market slams a stock, there's always the chance it'll come bouncing right back. We'll consult our Motley Fool CAPS community to find shares on the rebound, examining one specific sector of the economy in search of companies with rising CAPS ratings.
There are 247 stocks listed under "diversified services" in the CAPS' screener, but more than a handful of them carry well-respected four- and five-star ratings. Those accolades mean our 170,000 CAPS members are confident that these stocks will beat the market in the months ahead, but let's see what members are saying about these:
|
Company
|
CAPS Rating Today (out of 5)
|
Recent Price
|
52-Week Price Change
|
Estimated 5-Year Growth Rate
|
| Collector's Universe (Nasdaq: CLCT ) |
*****
|
$14.88
|
17%
|
20%
|
| LML Payment Systems (Nasdaq: LMLP ) |
*****
|
$3.74
|
85%
|
NA
|
| Stonemor Partners (Nasdaq: STON ) |
****
|
$27.54
|
35%
|
13%
|
Sources: Motley Fool CAPS, Yahoo! Finance. NA = not available.
The markets have been on a roller-coaster ride lately, but with the S&P 500 up more than 25% over last year, it might be surprising to learn that the CAPS diversified-services stocks have done somewhat better, rising 36% in that same time span. So let's take a closer look at why investors think some of these other companies won't be jumping from the frying pan into the fire now that the markets are roiled again.
Some spring in its step
It's not a perfect proxy by any stretch, but generally speaking, if the art market is doing OK, we might expect Collector's Universe to do well, too. If you compare the stock of art auction house Sotheby's to that of CU, there's a certain symmetry between the two (though Sotheby's has returned gains much higher for investors). They move closer to one another than to either the S&P 500 or the price of gold.
There might be a certain sense to that. CU is a leading authenticator of rare coins, sports memorabilia, and autographs. Investors looking to sell or buy these items will seek out a disinterested third-party stamp of approval on their authenticity and value. If art collectors in general are buying, other rare and precious items are likely to be in demand, too.
Collector's Universe provides that service, particularly for coins, which represent more than 70% of its revenues. It's interesting, therefore, that its stock doesn't more closely track the price of the SPDR Gold Trust (NYSE: GLD ) , since the price of the precious metal influences whether dealers will want to trade their gold coins or not.
But CAPS member sk8terman thinks gold prices will influence a lot more sales in the future, and it's difficult to not like its dividend that currently yields 8.7%.
High, very well covered yield. With the major rise in silver and gold there will be a huge increase in coin sales. CLCT should see a dramatic rise in revenue and will return this to shareholders with dividend boosts. They can already afford to do it, but are being conservative with [their] cash position.
Collect other opinions on the Collector's Universe CAPS page, and add your own while you're there.
Not all grocers are green
LML Payment Systems provides authentication services of a different kind. When you make a purchase online or otherwise use a credit card, the immediate, behind-the-scenes check of your creditworthiness that lets the merchant know whether you're good for the money is LML's job.
Although business has been good for LML -- transaction payment processing was up 31% for 2010 -- don't be fooled by the tripling in total revenues realized. LPL scored some major patent-infringement victories last year, including a $7.5 million settlement from eBay's (Nasdaq: EBAY ) PayPal and a number of banks including Citigroup, HSBC, and Fifth Third Bancorp (Nasdaq: FITB ) . The 1,000% increase in its intellectual-property segment is largely made up of non-recurring revenues. Suffice it to say that LPL will have some tough comps this year.
But All-Star CAPS member alexreising says LPL isn't done yet.
1. After a first round of settlements for patent fees, the two rounds scheduled for October will likely be settled this summer... a big win
2. Suspect earnings will be decent
3. May benefit from Google Wallet connection to first data in the future.
Let us know on the LPL Payment Systems CAPS page whether this is a flash in the pan or a stock that investors really should check out.
A steaming cup of growth
If death and taxes are the two things in life we can't escape -- and the latter just might become so onerous as to kill you all by itself -- the Stonemor Partners ought to be a stock to consider. It's the second-largest cemetery-operator business in the U.S., behind Service Corp (NYSE: SCI ) , and if the recent activity of Carriage Services is any indication, this could be an interesting time in the death-care industry again.
Carriage Services has been buying up a number of smaller operations, perhaps ushering in a period of rollups similar to the one Alderwoods engaged in a few years ago before being bought out itself by Service Corp. Stonemor has shown a willingness to make acquisitions, too, buying a North Carolina operator in the first quarter and several properties a year ago.
Investors think death becomes Stonemor, with 94% of the 115 CAPS members rating it saying it will outperform the market. Keep an eye on how interested the Grim Reaper might be in Stonemor by adding the stock to the Fool's free portfolio tracker.
The ball's in your court
There are many factors that go into whether a stock is a buy or sell, so it pays to start your own research on these stocks on 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. Head over to CAPS today, and share your thoughts with other investor analysts on whether you think these stocks are ready to bound higher.
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