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 dozens of times in value over the past decade. These aren't penny stocks. They're viable companies that have sound business prospects and achieve phenomenal returns every year. Finding just one or two of these monstrously successful companies can help you establish a winning portfolio.
Stalking the monster
To find tomorrow's monster stocks, we'll enlist the 110,000 members 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.
Of course, this is not a list of stocks to buy -- or, for those monster stocks that our CAPS All-Stars have already found, to sell. Just consider them starting points for your own further research.
Working bankers' hours
Washington Mutual has endured the loss of $3 billion, increases in loan loss provisions, and deteriorations in residential mortgage credit. Meanwhile, the bank estimated that total mortgage-related losses would be at the upper end of its guidance. On a brighter note, it also said that early-stage delinquencies for its subprime portfolio appear to be stabilizing, and that may be a sign that WaMu is ready to turn the corner. Despite the mostly bad news, though, a fund has disclosed that it has established a 6% stake in the country's largest savings and loan -- although, for the record, we don't know precisely when that occurred. It could have been earlier in the year, before the current debacle.
CAPS All-Star member InvestorDeb views an investment at these distressed prices as a relatively low-risk option.
I actually bought ... shares @ 3.98 because I viewed this as a call option with no expiration date. This stock is either going to 0 or will be taken higher by a buy-out, merger or takeover. With a risk reward of $4 on the downside and unlimited upside, it is a speculative call, but the non-expiry option rationale justified a small position.
Any port in a storm
Contrast the turmoil in Washington Mutual shares with the calm seas that Diana Shipping has been sailing on. As charter rates remain strong, the Greek dry-bulk shipping company was able to double its profits this quarter, and other shippers, including DryShips (Nasdaq: DRYS) and Excel Maritime (NYSE: EXM), also showed that the wind was filling their sails.
The broad success of the shipping industry has some CAPS members finding their performance anchored to the growing global marketplace. As radamus put it, "I think the dry bulk shippers as a group should outperform as long as 'globalization' and demand for commodities continues, but the better ones, like [TBS International], [DryShips], [Genco Shipping], and [Eagle Bulk Shipping], especially so."
Blowing in the wind
Speaking of having the wind at its back, American Superconductor has seen its shares double over the past 12 months as sales into the growing Chinese wind market have boosted revenues. Some critics contend, however, that there may be turbulence if, as suspected, the buyer of American Superconductor's technology turns out to be a related party.
This is a company that can inflame passions on both sides. Speaking for the bulls, CAPS member loststallion38 believed back in May that its current technology will be enough for the company to finally become a profitable business:
A year ago people [were] saying dump this puppy, that it was losing money hand over fist and now … what a difference a year can make. You gotta spend money to make money, and finding a profitable energy fuel that doesn't rely on fossil or oil is tough enough, but [American Superconductor] is ahead of the class. Yes the oil crunch is helping this stock in moving up … [but] they are creating the … future fuel and that isn't easy to do. We have relied on oil and fossil for over a century. Keep your eye on this company. [It's] still learning and starting to bring in some profits.
A chance for scary growth
It pays to start your research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page. Then weigh in with your own thoughts, and let's hear whether you think these are tomorrow's monster stocks that have been uncovered today.
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