Should You Buy These Stocks Now?

Some stocks simply have such great potential that "everyone" knows they're a good buy today. Yeah, right.

If we knew in advance that LabCorp would return about 1,100% over the past decade, we'd have mortgaged our house on it. It's easy to see which companies have been winning investments after the fact. We need to know beforehand which stocks will grow hundreds of percent in value over the years. That's where Motley Fool CAPS comes in.

The more than 80,000 professional and novice investors in CAPS rarely agree on a stock's prospects. Motley Fool Stock Advisor recommendation optionsExpress (Nasdaq: OXPS) is a well-respected, top-rated stock; still, just 940 of the 965 CAPS players to rate it believe it will outperform the market. So when you come across a stock where everyone who's rating it on CAPS thinks it will outperform, you've got something special. Here's a handful of those "obvious" investments.

Company

Bulls

All-Star Bulls

Price

Return on Capital, TTM

NATCO Group (NYSE: NTG)

230

81

$53.61

20.6%

Limco-Piedmont (Nasdaq: LIMC)

26

6

$10.60

N/A

Quaker Chemical (NYSE: KWR)

31

9

$19.40

6.5%

Haemonetics (NYSE: HAE)

21

5

$55.63

9.1%

American Pacific (Nasdaq: APFC)

28

11

$14.98

8.2%

Sources: Motley Fool CAPS, Yahoo!, and Capital IQ, a division of Standard & Poor's. Prices reflect yesterday's close. TTM = trailing 12 months; N/A = not applicable.

As always, none of the companies on this list should be considered formal recommendations -- just starting points for further research.

A new class of opportunity
It has been six months since NATCO first appeared on our list of stocks with a unanimous outperform call. Since then, sales at the oil and gas production equipment manufacturer have risen from 8.2% year over year to 9.8% year over year, its share price has increased 12.3%, and the number of CAPS bulls rating the stock to outperform has more than doubled.

As oil prices remain stratospheric (even as natural gas weakens), the demand for equipment to get more of the black gold out remains high. So companies like NATCO that give oil companies the tools they need to prosper are enjoying the fruits as well. Nor does demand appear to be abating, particularly in China, as CAPS investor YeshuaHaMashiach noted yesterday.

Oil and gas are critical issues globally. Until solar energy and other energy sources can overcome price and availability of fossil fuels, this area of energy production will continue to soar. China and other emerging markets are energy hungry, and the law of supply and demand is going to drive profits of efficient companies.

Another CAPS player, TexasLonghorns, likes the company's position as well as the fundamentals. Here's his pitch from a few days ago.

Everything you need to get gas in the tank, these guys give you!! Look at the PEG, insider ownership and the way they treat shareholders.

It's difficult for a stock to remain in such a bullish trend the way NATCO has. That might be partly because it flies under the radar of most analysts. Only five cover the services company, compared with more than two dozen who follow competitor Baker Hughes (NYSE: BHI).

Let's hear from you
How about your take on these or other "obvious" winning investments? If you want to add your 2 cents, sign up to join the Motley Fool CAPS community, which is 100% free.

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Related Tickers

NATCO Group, Inc.

NTG Up! $50.89 +0.09 (+0.18%) 3:49 PM
CAPS Rating:
344 Outperforms
3 Underperforms
Rate This Stock

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