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Why Ellie Mae Is Poised to Pop

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, mortgage industry software specialist Ellie Mae (NYSE: ELLI  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Ellie Mae and see what CAPS investors are saying about the stock right now.

Ellie Mae facts

Headquarters (founded)

Pleasanton, Calif. (1997)

Market Cap

$604.2 million


Application software

Trailing-12-Month Revenue

$101.9 million


Co-Founder/Chairman/CEO Sigmund Anderman

President/COO Jonathan Corr

Return on Equity (average, past 3 years)



$60.4 million / $0



Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 99% of the 151 members who have rated Ellie Mae believe the stock will outperform the S&P 500 going forward.

Earlier today, one of those Fools, TMFInnovator, succinctly summed up the Ellie Mae bull case for our community:

- Rapidly growing user base (+40% yr/yr) that is adopting the Encompass software solution.
-As users become more comfortable/familiar with Encompass, switching costs rise and # of transactions/user increases (revenues to ELLI).
-Asset-light business model that is easily scalable.
-Huge addressable market that is in flux due to increased regulations. Increased regulation is good for ELLI business.
-Network Effect: The Ellie Mae Network becomes more valuable as more users subscribe.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong five-star rating, Ellie Mae may not be your top choice.

We've found another stock we are incredibly excited about -- excited enough to dub it "The Motley Fool's Top Stock for 2013." We have compiled a special free report for investors to uncover this stock today. The report is 100% free, but it won't be here forever, so click here to access it now.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

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