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.
However, the market's best stocks include companies that have risen dozens 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 105,000 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. Here are a few:
Source: Motley Fool CAPS. Score is how many percentage points that pick has outperformed the S&P 500.
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.
Spanning the oceans
While avian flu ruffled a lot of feathers two years ago, much of the commotion has died down -- but not the threat. The highly pathogenic H5N1 virus has afflicted humans in Indonesia, Egypt, and China so far this year. The World Health Organization fears that it is only a matter of time before the virus develops an efficient means of spreading from birds to humans. Currently, WHO ranks avian flu as a level 3 threat, meaning it causes disease in humans but doesn't spread easily.
Sinovac Biotech is the exclusive supplier of its whole-viron H5N1 pandemic influenza vaccine Panflu for China's national stockpiling program, having received a production license from the Chinese government in April. Other governments are (or were) stockpiling, Tamiflu -- developed by Roche and Gilead Sciences (Nasdaq: GILD ) -- though a number of companies like GlaxoSmithKline (NYSE: GSK ) are working on their own versions.
Yet Sinovac is more than just an avian flu vaccine manufacturer. For the recently completed first quarter, it saw a 123% increase in revenue, helped by Healive, its hepatitis A vaccine. Investors, though, like the potential that avian flu vaccine offers. CAPS player BADROCKER believes it's a speculative play, but finds potential for huge growth in this recent pitch:
This company is a speculative buy at best. Their H5N1 FLU vaccine (the only approved pandemic vaccine approved for the Chinese population and the stockpiling program) has been approved by the Chinese government. 22% Profit margin, 31% Return on Equity, 48% Revenue Growth, 19 times earnings. This company is held 26% by insiders and only 25% by institutions so still not respected as a growth play. Under $5 a share, we shall see.
Another CAPS investor zzlangerhans thinks the market is undervaluing Sinovac, failing to account the vaccine already on the market nor the large potential its avian flu vaccine represents. Here's an excerpt from zzlangerhans' mid-January pitch:
[T]hey had encouraging results from a phase II trial of a whole virion vaccine for H5N1 Avian flu... [T]hey have increasing revenues from marketed products, specifically Healive hepatitis A vaccine and Anflu influenza vaccine... Two major positive catalysts that may draw increased attention to this undervaluation are initiation of a phase III trial of H5N1 vaccine, and continued improvement in revenues in the next quarterly statement.
A chance for scary growth
Now's the opportunity for you to inoculate yourself against the market's gyrations and fill us in on the stocks our All-Stars believe could generate monster growth. Agree with their views? Tell us on CAPS. Disagree? Let us know that, too! If you've got an opinion, this is the place where your voice counts just as much as everyone else's. Let's hear whether you think these are tomorrow's monster stocks, uncovered today.
RSS Headlines
Fool UK