5 Top Tweeners

If you've ever sought to get seriously rich from stocks, then you've owned a tweener.

Neither up-and-coming superstars nor dominant veterans, tweeners are poised precariously in between. They're not as hot as they once were, and they're vulnerable both to young upstarts and old stalwarts. But they've honed their skills enough that they're still a force to be reckoned with.

The stock market has plenty of tweeners. They'll either create billion-dollar fortunes as they come to dominate industries, as Cisco and Microsoft (Nasdaq: MSFT  ) have, or they'll be destroyed in the process, as Gateway almost was. That's the problem -- investing in tweeners can be dangerous and exceptionally profitable. By picking his winners well, David Gardner produced nine years of 20% average returns hunting for misunderstood multibaggers in the making. His team at Motley Fool Rule Breakers continues the tradition today.

Let's have the list
You, too, can join in the effort, thanks to Motley Fool CAPS. Each week, we'll use the database to find three-star stocks -- CAPS' own tweeners, halfway between one-star duds and five-star MVPs -- that are expected to boost earnings by at least 15% annually over the next five years. Here are the latest contenders.

Company

Recent price

5-Year Growth Estimate

Yingli Green Energy (NYSE:YGE)

$21.08

48.0%

ScanSource (NASDAQ:SCSC)

$32.97

17.3%

China Techfaith Wireless (NASDAQ:CNTF)

$4.21

22.5%

Yahoo! (NASDAQ:YHOO)

$28.38

22.5%

Chipotle Mexican Grill (NYSE:CMG)

$123.05

26.8%

Sources: Motley Fool CAPS, Yahoo! Finance.

Bear in mind that this isn't a list of recommendations -- merely candidates for further research.

Yahoo! might have been a tempting choice before Microsoft's $44.6 billion buyout offer. And Chipotle still looks tasty at $123 a share, for all of the same reasons I've cited before.

From Big Red to Big Green
But my favorite for today is Yingli Green Energy, a Chinese producer of photovoltaic cells for generating solar power. Business has been good lately. Here's how CAPS investor TexasLonghorns put it in a December pitch:

Chasing almost [its] 52 week high here but the Chinese have no choice but to find alternative energy sources or they will choke to death on their own growth. Yahoo [Finance] has this one pegged at $192.00 a share. Maybe, maybe not. But worth a shot at these prices. Volatile as all Chinese stocks seem to be these days but long term should pay off well.

Especially if management continues to be conservative. Yingli has already stockpiled 70% of the silicon it needs for 2008, and earlier today, it revealed that it is reducing the thickness of its solar-gathering wafers by 10%. The result? Less raw material, which means lower costs and -- helloooo -- higher margins. I can see a short path from there to better cash flow and, thereby, higher returns.

But that's my take. What's yours? Would you buy Yingli at today's prices? Let us know by signing up for CAPS now. It's 100% free to participate.

See you back here next week for five more top tweeners.


Read/Post Comments (0) | Recommend This Article (10)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 569614, ~/Articles/ArticleHandler.aspx, 8/22/2014 8:32:22 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement