Dream Stocks for Internet Investors

Investors are always hunting for the next big stock -- the dream stock whose price increases several times over when the market finally discovers it. It's easy to look back and see what the 10 best stocks of the past decade were. But for my part, I'm more interested in the tools that can not only help me find new stock ideas, but also have the resources necessary to evaluate tomorrow's greatest companies.

There is a tool that offers a variety of resources to help with finding tomorrow's leaders: Motley Fool CAPS, a 120,000-member community of investors helping each other beat the market.

We've enlisted CAPS to screen for Internet stocks and get the story behind some of the more highly rated ones. CAPS' nifty screener will help us find stocks with:

• A market cap of at least $100 million.
• A three year revenue growth rate of at least 20%.
• A price-to-earnings ratio of less than 25.
• A gross margin of at least 45%.

Then we'll tap the collective intelligence of our CAPS members to see whether these companies present real opportunities -- or whether the numbers fail to tell the true story.

Opinions with the numbers
Here's a sampling from the list of stocks our screen pulled up today.

Company	Revenue Growth Rate, Past 3 Years	Gross Margin	CAPS Rating (out of 5)
Gmarket (Nasdaq: GMKT)	69.8%	49.7%	*****
Akamai Technologies (Nasdaq: AKAM)	38.1%	83.6%	****
Sohu.com (Nasdaq: SOHU)	32.1%	77.6%	***

Data and star rankings from CAPS. All data as of Oct. 31.

Gmarket
Korean e-commerce company Gmarket has grown quickly, just like Latin American online marketplace MercadoLibre (Nasdaq: MELI). And since Gmarket has been giving eBay (Nasdaq: EBAY) tough competition in Korea, the latter has resorted to plan B, seeking permission from South Korea's Fair Trade Commission to buy a piece of its native rival. Yahoo! (Nasdaq: YHOO) already owns a stake in the company, and things could get more interesting as eBay struggles and Gmarket continues to blaze a growth trail.

Gmarket's third-quarter results show that growth isn't letting up. Its total revenue rose by 32% from last year, and its gross merchandise value, the total value of all items sold on its website, grew by 26%. This led to a 154% increase in net income for the quarter, as the company continues to further distance itself from the competition. In CAPS, more than 95% of the 408 members rating Gmarket expect it to outperform the market.

Akamai
Despite a slowing economy, content delivery company Akamai manages to keep growing. Its third-quarter revenue grew 22% from last year, and it posted $93 million in operating cash flow, up from $76 million last year. The company will be expanding into new areas as well, entering online advertising with its acquisition of data company Acerno, and forging into the high-definition streaming-video market with teammate Microsoft.

The company is also keeping its longtime clients happy and interested in its services; its average revenue per customer rose 14% over last year. The company boasts a 71.3% gross margin, and management continues to expand services to not only differentiate itself from the rest of the pack, but also add increased value to its customers. Despite tough competition, more than 95% of the 2,367 CAPS members rating Akamai expect it to beat the S&P.

Sohu.com
As if there already weren't enough reasons to believe in China's vast potential, online portals like Sohu.com are already capitalizing on the country's booming Internet trends. After Baidu.com (Nasdaq: BIDU) blew away expectations with solid quarterly results two weeks ago, Sohu -- the official online reporter for the summer Olympic games -- provided a solid earnings report of its own. Overall revenue grew 134% to $120.7 million, while net income rose 316% to $1.02 a share, once again beating analysts' estimates. The company has a penchant for doing so.

One of the big drivers for growth at Sohu.com was its online gaming division, which increased revenue 330% to $54.6 million in the quarter. A diverse revenue stream and strong macro trends also gave the company confidence to forecast fourth-quarter earnings well beyond what Wall Street had estimated. With its track record of overachievement, nearly 94% of the 764 CAPS members rating Sohu.com are bullish on its prospects.

Let 120,000 investors be the judge
The collective wisdom of a huge pool of investors can help give context to a page of numbers developed through a stock screen. But even with an entire community of qualified opinions acting as the judge, individual investors are still the jury and should perform their own due diligence.

Run your favorite factors through the Motley Fool CAPS screener. It's totally free, and we think you'll like the results.