Tomorrow's Monster Stocks

Famed money manager Peter Lynch called them "10-baggers" -- the stocks that climbed to 10 times the value he paid for them. They're rare, but not impossible to find. Especially when you've got Fools for friends.

If you look back over the market's best stocks, you'll find companies that have risen in value over the past decade by 3,000%, 5,000%, and even 24,000%. They're not penny stocks, but viable companies with sound business prospects -- companies that are achieving phenomenal returns every year. You need to pick only one or two monster stocks to have a winning portfolio.

Stalking the monster
So where can we find tomorrow's monster stocks today? At Motley Fool CAPS we track the opinions of more than 76,000 investors who are working collectively to identify those winners. Thousands of stocks are rated by both novice and professional analysts. The opinions of the best stock pickers are weighted more heavily in determining a stock's CAPS rating of one to the maximum five stars.

Investors at CAPS are rated as well, and we call the best of them All-Stars. We've compiled a list of these top players, who, like Peter Lynch, have already found monster stocks -- companies that have doubled, tripled, or quadrupled in price. Then we've given you some of their recent picks for stocks they consider equally promising.

Of course this is not a list of stocks to buy -- or, for those monster stocks that the CAPS All-Stars have already found, to sell -- it's a jumping-off point for doing additional research.

Drilling deep for growth
As the offshore drilling industry consolidates with Transocean (NYSE:RIG) acquiring GlobalSantaFe, other names in the industry have become attractive candidates as well. ENSCO, itself a top-flight driller, is mentioned along with other industry names in speculative merger talk. When looking at valuations, that's where ENSCO looks eye-catching -- and why it floats to the top of any analyst's list.

Those valuations are what caught the eye of CAPS player jeepdude703, who thinks ENSCO is the better value, particularly when put up against a leader like Transocean.

Compared to some of ENSCO's competitors, such as Transocean, ENSCO is the better value. The price-to-earnings ratio (P/E), price-to-book (P/B) ratio, and price/earnings/growth ratio (PEG) are lower, while operating and net margins are better ... and ROA and ROE are better.

I like that management isn't afraid to steer away from contracts with unfavorable terms and areas of operation that pose too great a security risk. Such behavior suggests that management is more willing to protect the company's assets, hence long-term shareholder interest, rather than make a few more dollars in the near-term. I believe that stock options can be an effective performance-based award, but I very much dislike when options are given away. It appears that ENSCO attempts to minimize the dilutive effects of options, at least comparatively.

Those numbers also looked good to CAPS All-Star Frenchyx, who sports a 97.35 player rating and considers ENSCO a takeover target as well.

In the driller group, has good fundamentals, low PEG, but is underperforming the group. Yet 24 analysts estimate v. good earnings for next year. There is also consolidation in the industry, so it is a takeover candidate.

A chance for scary growth
Now's the opportunity for you to weigh in on ENSCO or any of the other stocks these All-Stars see as achieving monster growth. Agree with their views? Tell us on CAPS. If you don't agree, let us know that too! If you've got an opinion, then this is the place where your voice counts just as much as everyone else's. Let's hear if you think these are tomorrow's monster stocks that have been uncovered today.

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