These Stocks Beat Biotech Stocks

It seems that almost daily, some young biotech company makes a breakthrough advance with a drug that also sends its stock -- and investors' wealth -- soaring.

But I've found investments from another sector that are beating the pants off biotech stocks -- and I know where you can find out more about them.

Would the real hot stocks please come forward
The 5,600 stocks that more than 97,000 Motley Fool CAPS community members have rated include descriptive "tags" that group them with other companies sharing similar qualities -- a country of origin, a sector, or an end product, for example. Clicking the Biotechnology tag pulls up a list of 291 stocks that -- despite a 20.4% rise in the last 30 days -- has dropped 8.7% in the past year.

But CAPS tags can lead you to stocks that have outpaced even the near-term returns from the biotech group: Aluminum. This group comprises 15 companies that have outperformed the returns of the broader market and biotech group with a 42.6% average gain in the past year.

Each group has its share of winners and losers, of course, but CAPS can be a great resource for zeroing in on potential opportunities in each area.

From macro to micro
You can sort tag groups by their CAPS ratings, from one to a maximum of five stars, and then see which players -- from Wall Street to Main Street -- are bullish or bearish on a company and why.

For instance, here are a few stocks in the biotech group:

Now, based on the interest in the CAPS community, here's a sampling of aluminum stocks that investors may want to consider.

Commodities + China = $$$
It's difficult to see how investors could go wrong investing in commodities these days. Developing nations such as China and India seem to have insatiable demands for raw materials. It's no wonder Aluminum Corporation of China -- or Chinalco -- is one of the most highly favored stocks today.

It is possible that aluminum stocks are being propelled by the commodities boom. The metals sector is awash with talk of consolidation; many of the biggest players are jockeying for more control of the market. Aussie giant BHP Billiton has approached Rio Tinto more than once with an offer to acquire the company. To help blunt the competitive impact from such a potent combination, Chinalco and Alcoa teamed up and paid a premium earlier this year for a 12% stake in Rio Tinto.

Among the rumors this past week were that BHP will again increase its offer for Rio Tinto, which bumped up shares of the London-based miner, and other water-cooler whispering implied the Chinese might go after a stake in BHP Billiton.

All this is going on while prices for commodities continue to soar, with predictions that prices for coking coal could more than triple from 2007 levels. The speculation has helped drive up the shares of many diversified miners so far this year, but Chinalco has seen its stock wither more than 20%.

For many CAPS investors, the lower price for Chinalco just brings more opportunity. Citing solid fundamentals and growth prospects, some see the Chinese aluminum producer as a company caught up in the recent pullback of many Chinese companies and one that's being unreasonably punished. Today, more than 97% of the 2,740 CAPS investors rating Chinalco say it will beat the S&P in future.

Before you buy ...
Of course, what's happened in the past is no indicator of where investors should put their capital now. But the underlying reasons behind dramatic runups in stocks or groups of stocks can clarify trends that could affect investments significantly.

Just make sure to do your own due diligence rather than simply following crowds or individual recommendations.