Wall Street can't generate enthusiasm for the companies listed below. So why do our Motley Fool CAPS members disagree? They've bestowed on these companies the highest four- and five-star ratings, signaling their faith that the associated businesses will outperform the market while Wall Street offers lackluster support at best.
So who has it right? The professional class of analysts sitting in their paneled offices smoking stogies, or a motley crew of community investors pooling their best thoughts for others to share? We think we know who'll come out ahead. How about you?
|
Stock
|
CAPS Rating (out of 5)
|
No. of Analysts
|
Wall Street Bullish Sentiment
|
CAPS Bullish Sentiment
|
| Cal-Maine Foods (Nasdaq: CALM ) |
**** |
7 |
57% |
95% |
| Koninklijke Philips (NYSE: PHG ) |
**** |
8 |
63% |
94% |
| MAKO Surgical (Nasdaq: MAKO ) |
**** |
9 |
67% |
95% |
Source: Motley Fool CAPS.
As much as we love our CAPS community, don't buy these companies just because they've garnered top ratings. And don't sell 'em just because Wall Street says to either. Investing requires closer diligence on your part, so use these ratings as a launching pad for your own research.
Scrambled eggs
It might be incredible and edible, but the simple egg is lately suffering an image problem. From inhumane conditions and cruelty charges for egg-laying hens that led McDonald's, Wal-Mart, and Target to drop a large producer, to salmonella poisoning, mostly related to one farm that has since chosen to go out of business, the egg production business is running around like a chicken with its head cut off.
Egg production is actually up 1% year over year through October, but the number of layers is down as chicks hatched fell 8%. Cal-Maine Foods, as one of the country's largest egg producers, has escaped the taint of scandal, but one rotten egg can stink up the whole coop. Last quarter, revenue rose 28%, mostly from higher prices, but eggs produced rose 3% and total dozen eggs sold rose 7%.
The drag that Cal-Maine finds, as do poultry producers like Tyson and Sanderson Farms (Nasdaq: SAFM ) , is the high cost of feed, which Cal-Maine said was up $0.15 per dozen from the previous quarter and shows no signs of abating.
Wall Street might be struggling with the volatile nature of the egg production business, but retail investors like CAPS member gamblingkev look at the growth of Cal-Maine's specialty egg business (up 13% and now accounting for 16% of total dozen eggs sold) and see something to cluck about: "CALM will struggle with higher feed prices but the company is so well managed and they've done a good job of converting customers to higher priced eggs over their lower priced ones."
Add the egg producer to your watchlist then head over to the Cal-Maine Foods CAPS page and tell us if this is a stock to get egg-cited about (yeah, the industry lends itself to bad jokes like that).
Tuning out
We just saw it the other day in the announcement from Corning (NYSE: GLW ) on demand for Gorilla Glass, and we heard from RealD (NYSE: RLD ) and Samsung last month in regards to 3-D technology: Television sales remain weak. After that burst of big-screen-TV buying a few years ago that preceded the national conversion to digital TV signals, demand just isn't there, so Corning is reducing capacity and Samsung is exiting the TV business.
It shouldn't come as much of a surprise that Philips Electronics is also abandoning its loss-making TV business. It will still retain a 30% stake, but the conglomerate that will now focus on health care and other consumer goods will be selling (pending approval) the lion's share of its TV segment to Hong Kong-based TPV Technology.
That could be why the CAPS community stands behind the electronic technology leader. By jettisoning those businesses that are losing it money and focusing on those that are profitable, it should have better long-term prospects. Tell us on the Philips Electronics CAPS page or in the comments section below if you agree. Then follow along with its progress by adding it to your watchlist.
House of pain
MAKO Surgical is taking robotics to new levels in surgery, doing for knee replacement and now hip replacement what Intuitive Surgical (Nasdaq: ISRG ) did for surgeons and Hansen Medical is doing for catheters. The MAKOplasty Total Hip Arthroplasty procedure is yet another potentially large, recurring revenue stream.
Revenue this past quarter jumped 67%, but the company reported wider-than-expected losses as higher expenses for sales, marketing, and research climbed. Analysts are expecting those losses to narrow next quarter, though, as sales are anticipated to surge 88%, so it's surprising more aren't getting on board.
CAPS member WilliamCrook2003 is, though, and he sees the hip replacement procedure as just one more lever for MAKO turning profitable.
I see a great deal of growth potential in this company, this is evident in as much as this is the fastest growing tech company in the USA. I believe the share price reduction of late is a great opportunity for me to add shares of this company to my real live portfolio.
You can tell us on the MAKO Surgical CAPS page or in the comments section below whether you believe it will continue climbing out of the hole it dug and then follow its progress by adding it to the Fool's portfolio tracker.
What's wrong with that?
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