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 180,000 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
|vanamonde||99.99||XL Capital||490.40||Diamond Foods (Nasdaq: DMND )||**|
|BravoBevo||99.99||Skilled Healthcare Group||458.01||First Solar (Nasdaq: FSLR )||**|
|translator999||99.96||Oshkosh||431.69||Silvercorp Metals (NYSE: SVM )||***|
Score is by 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.
Hiding in plain sight
After losing 70% of its value over the past two months, it's easy to see why investors might think nut processor Diamond Foods has priced all the negative news into its stock.
The company was rocked by allegations that it paid off walnut growers with extra money that was improperly accounted for on its financial statements. Diamond previously disclosed that its audit committee was looking into a $50 million payment to walnut growers made in September of the current fiscal year for walnuts purchased last year. Had that payment been included in Diamond's financial statements then, operating profits would have been halved.
It threw into jeopardy Diamond's purchase of potato-chip maker Pringles from Procter & Gamble (NYSE: PG ) , a move that would triple the size of its snack business and put it on a footing with General Mills and ConAgra (NYSE: CAG ) .
Worse, a director committed suicide this month, forcing the company to state that there was no linkage between the death and the probe, but investors weren't taking any chances and sold off the stock further. Now the subject of several shareholder lawsuits, the stock is mired at prices it hasn't seen in over two years.
Highly rated CAPS All-Star TSIF is one of those who think Diamond may be due for a rebound, but as TSIF notes, "catching a falling nut is not generally a wise move." Let us know in the comments section below what you think of the situation, and then add the snack maker to your watchlist to see whether it cracks under the pressure.
A long time coming
Everything is sunny for the CAPS Solar Power sector, as stocks in the niche were up nearly 5% on average yesterday. Hope that Europe won't devolve into financial chaos led markets to push up the shares of First Solar, LDK Solar, and JA Solar (Nasdaq: JASO ) .
It seems a fleeting bit of glory, though, as solar finds success close to impossible unless it's hanging off the government's apron strings. Without the taxpayer propping up these companies, they're unlikely to make it through these times of financial austerity. Moreover, producers seem hell-bent on producing ever greater amounts of polysilicon, driving down prices and wreaking havoc on margins.
First Solar, despite the respite from the downward pressure on its stock, has lost three-quarters of its value from the highs it traded at earlier this year. Like Diamond Foods, investors might be thinking it's pretty much bottomed out. Not MajorBob04, however, who believes there's more pain in store: "Solar technology is still too expensive to be a great commercial success, thus unless governments support the [industry] (which they can't do now due to high levels of debt), solar industry companies will be suffering for awhile."
I tend to agree with his assessment and have marked First Solar to underperform the broad indexes, but you can let us know on the First Solar CAPS page if you think there are sunny days ahead, and then add the stock to the Fool's free portfolio tracker and see whether the bulls or bears have it right.
A rocket higher?
China-focused silver miner Silvercorp would like to get back to mining, thank you very much. Hit by allegations of financial impropriety by an anonymous short-seller, it was subsequently cleared of wrongdoing by an internal investigation conducted by accounting firm KMPG. I think such internal probes can be a little self-serving, but then again so can anonymous hit pieces. However, Silvercorp spent $1.5 million on the investigation and, coming up clean, prepares to do what it does best -- mine silver.
With silver prices rising, the miner is hoping to continue improving its financial position. Quarterly profits rose by 49% as the price of silver doubled and revenues were 71% to $62 million. Production rose as well by 4%, and its gold production rose to more than 2,500 ounces with realized prices north of $1,300 an ounce.
Of course, if you're looking to invest in silver, there might be better options than Silvercorp. For example, Silver Wheaton (NYSE: SLW ) may just be the best bet if the precious metal does hit $100 an ounce, as Christopher Barker enthuses.