Tomorrow's Monster Stocks

Stocks that climb to 10 times their original price are a rare breed -- but they're not impossible to find. Especially when you have Fools for friends.

The market's best stocks include companies that have risen hundreds of times in value over the past decade. These aren't penny stocks; they're viable companies with sound business prospects, achieving phenomenal returns every year. Finding just one or two of these monstrously successful firms can help you establish a winning portfolio.

Stalking the monster
To find tomorrow's monster stocks, we'll enlist the more than 82,000 investors at Motley Fool CAPS. We've compiled a list of the most successful CAPS players, 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.

Player

CAPS Rating

Monster Stock

CAPS Score

Recent Stock Pick

CAPS Rating (5 max)

pbillions

96.75

First Solar

507.68

Garmin (Nasdaq: GRMN  )

****

pigsfeet007

98.74

First Solar

428.55

Dell (Nasdaq: DELL  )

**

TrackBWS

91.28

Sigma Designs (Nasdaq: SIGM  )

391.22

Biogen Idec (Nasdaq: BIIB  )

***

stockgripes

98.51

Dendreon

457.53

LDK Solar (NYSE: LDK  )

***

techvalu

96.48

Suntech Power (NYSE: STP  )

114.89

OmniVision Technologies (Nasdaq: OVTI  )

****

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.

Solar's cloudy future?
Without question, solar stocks were a growth story -- if not closing in on tulip mania -- in 2007. Indeed, it was with solar stocks like First Solar (as the table shows) that many CAPS All-Stars achieved their monster status. Yet will LDK Solar be able to shine as brilliantly as First Solar or Suntech Power?

There are some pretty sharp skeptics who've wondered about LDK's ability to shore up polysilicon supply; the stock has seen runaway pricing as demand for the substance has jumped with interest in solar energy. Polysilicon accounts for approximately 75% of LDK's cost of goods sold, yet LDK also maintains contracts for 100% of its supplies that extend through much of this year, which should keep costs in line. Margins, however, will contract further, unless the company continues to work on cutting costs as it sells more of its product outside China, where wafer pricing is not as strong.

While an inventory scandal was a setback last year, many CAPS investors believe the worst is behind LDK. CAPS player bosch1974 believes the new factory under construction will also help push margins higher:

I don't think they have fully recovered from their inventory scandal. Even the slightest slip punishes the stock. Once their factory is complete profit margins will soar as will the stock.

Others, like wildeagain, see the sell-off in solar stocks as an indication it may be time to buy them -- perhaps all of them:

25% drop on margins. It's going to happen to the other solar companies because of silicon costs too. So are all the solar companies going to drop 25% on quarterly report day? If so, I'll be right behind them to buy every time. LDK and TSL ... [b]oth have one thing in common in their favour too. They're building plants to take care of their costs better.

Of course, there are All-Stars who are perhaps thinking of all those tulips; last November, abitarecatania, with his 94.95 player rating, took a sardonic look at how solar stocks seem to sprout.

I do not know why the Chinese work so hard. All they have to do is list a stock in the U.S. with China + Solar and they can become billionaires.

A chance for scary growth
Now's the opportunity for you to weigh in on LDK 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! Let's hear if you think we've uncovered tomorrow's monster stocks today.


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