By
Ilan Moscovitz
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More Articles
October 13, 2008
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Warren Buffett made billions buying undervalued companies before market sentiment swung back in their favor. Legendary sandalwood bandit and handlebar-mustache-wearer extraordinaire Veerappan made his personal fortune by staying one step ahead of the law. And our Motley Fool Hidden Gems newsletter is currently beating the market by 16 points with its recommendations of small-cap companies that hadn't yet registered on Wall Street's radar -- like Ctrip.com (Nasdaq: CTRP ) , up an average of 112% over its several picks.
With that example in mind, I used our new CAPS screening tool to find some stocks poised for big gains -- before Wall Street catches on.
These companies have:
- Trailing-three-year EPS growth of at least 10%.
- Market capitalizations of at least $200 million and no more than $10 billion.
- Four- or five-star ratings in CAPS, the highest, up from one to three stars at the beginning of 2008.
Remember, in the first 20 months since the launch of CAPS in late 2006, five-star stocks like Rofin Sinar (Nasdaq: RSTI ) outperformed all other categories, climbing at an average annual rate of 12%.
Here are some of the companies I found:
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Company
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Share Price
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Sector
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Trailing-3-Year EPS Growth
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CAPS Rating
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Bare Escentuals (Nasdaq: BARE )
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$13.90
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Consumer Goods
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65.8%
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****
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Dick's Sporting Goods (NYSE: DKS )
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$17.93
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Services
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30.2%
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*****
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NutriSystem (Nasdaq: NTRI )
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$14.80
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Services
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93.5%
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****
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Skechers USA (NYSE: SKX )
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$13.70
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Consumer Goods
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22%
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****
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Under Armour (NYSE: UA )
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$27.90
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Consumer Goods
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35.6%
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****
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Data from Motley Fool CAPS as of Oct. 13.
Remember a screen serves as a first step to finding great investments, which you should follow with your own due diligence. Come and join us on Motley Fool CAPS to dig into these companies further. Our 115,000-person-strong (and counting) CAPS community can help you stay a step ahead.
For more CAPS content:
In the coming weeks, Fool co-founder David Gardner and his Motley Fool Pro team will invest $1 million in a portfolio designed to help you make money in any market. The service, which just launched, will rely heavily on proprietary CAPS "community intelligence" data to establish long and short positions in a broad range of securities, including common stocks, publicly traded put and call options, and exchange-traded funds (ETFs). To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.
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