Finding Stocks at a Fever Pitch

The collective power of thousands of investing minds is the driving force behind Motley Fool CAPS, a leading investor-intelligence community. Membership has actually grown to more than 100,000 investors: professionals, novices, and every level in between.

One of the service's unique features is that you can not only pick whether a company will outperform or underperform the market, but also express why you think it will, in as much detail as you want. These analyses, or "pitches," can be as simple as "This stock has a low P/E ratio," or as complicated as a multipage, footnoted thesis. In the overall assessment of the stock, a pitch is another data point to consider.

Throwing strikes
Useful analyses are those that give salient details about a company and its prospects -- on both the bull and the bear side -- and the best ones earn recommendations. Not everyone can become famous picking stocks and detailing their reasons, but they can be called "pitch-writing superstars." Let's look at these top investors and some of their best recommendations and get a sense of what makes up strong analyses and winning investing.

abitarecatania not only is a top pitcher who has received more than 570 recommendations for pitches, but also is an All-Star with a 98.73 player rating. Here are a few of this player's most recent stock picks.

Company

CAPS Rating

Call

CAPS Score

Pitch

Delta Airlines (NYSE: DAL)

*

Outperform

(17.39)

No pitch

Evergreen Solar (Nasdaq: ESLR)

***

Underperform

(3.85)

No pitch

Fifth Third Bancorp (Nasdaq: FITB)

*

Underperform

25.51

Read it!

Hovnanian (NYSE: HOV)

*

Underperform

3.78

No pitch

KeyCorp

*

Underperform

37.18

Read it!

Paragon Shipping

****

Underperform

9.03

Read it!

Regions Financial

**

Underperform

23.91

Read it!

Solarfun Power (Nasdaq: SOLF)

***

Underperform

2.34

Read it!

UBS (NYSE: UBS)

*

Underperform

(6.22)

No pitch

Valence Technology (Nasdaq: VLNC)

*

Underperform

(8.26)

Read it!

Thin is in
While thin-film solar panel technologies are gaining credence and acceptance, particularly as traditional solar companies ran into bottlenecks with polysilicon supply, Evergreen Solar continues to develop its String Ribbon technology. This -- while still using crystalline silicon -- has cut its consumption to less than five grams per watt, or about half what typical solar companies use. The company also believes it will soon be able to reduce that even further to about 2.5 grams per watt. At such reduced levels, it should be competitive with thin-film technology, which involves depositing several thin layers of complex materials such as copper indium gallium diselenide onto a substrate, such as glass, to make a solar cell.

Joint venture EverQ -- Evergreen Solar owns one-third of it -- has been cranking up production to more than 100 megawatts of power, making it one of the reasons behind Evergreen's success.

Although abitarecatania has marked this stock to underperform, many investors, like CAPS player Grifbrick, see Evergreen Solar as just getting started. "Not as popular as other solar names, but the technology gives them a cost advantage in crystaline solar cells and they are ramping up production now."

Similarly, ghoul101 feels that with new contracts and an efficient production process, Evergreen Solar should be the next solar stock to climb.

This stock is a great all around cheap way to get a position in the solar sector, and with a great company. Evergreen Solar uses one of the most energy and cost effective means of production for their solar cells. The silicon waste from their wafer production is significantly lower than most other solar companies... [Evergreen Solar] is one of the smaller cap solar companies, but by no means should [it] be overlooked when looking into solar stocks.

Inside pitches
Just because a top-rated All-Star investor writes a top-recommended pitch for a company, that's no reason to go out and buy or sell the stock. You still need to perform your own due diligence. But it's worth considering what they've said as you make your decision.

A Foolish stance
Step up to the batter's box of Motley Fool CAPS and make your opinions known. Because CAPS is a completely free service, throw as many pitches as you like at the stocks of your choice. You'll be helping your fellow investors make better decisions.

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Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.

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  • On June 19, 2008, at 1:19 PM, 88778877 wrote: Report this Comment

    YGE and SOLF have extremely LOW forward PE yet other solar stocks are outperforming them with relatively high PE.

    Can anyone say why?

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