Drink In These 5 Top Stocks

Whether it's the corporate lunchroom, your cubicle, or the local watering hole after work, there are regular places we gather to discuss news, sports, or -- if you're like us -- stocks. Here at Motley Fool CAPS, we gather around the virtual water cooler daily to rate stocks and delve into their merits as investments.

Our 145,000-strong CAPS community -- where members give the thumbs-up or thumbs-down to about 5,300 stocks -- seeks businesses it thinks will outperform the market. Below, we'll take a look at some of the most popular and talked-about stocks in the CAPS universe, and examine whether you think they'll continue their winning ways.

A tall drink of water
Looks like Abercrombie & Fitch got the memo. It was hardly a secret that the edgy teen retailer loathed discounting its merchandise, believing instead that consumers were willing to pay up for its brand. But almost three straight years of constantly declining annual same-store sales -- and November's alone were down 17% -- apparently brought about a change of heart.

Good thing, too. Consumers have been itching to spend the money they had been hoarding to make it through the recession, and U.S. retailers took advantage of the extra day of holiday shopping this year to boost sales 3.6%. Analysts report that Abercrombie & Fitch wasn't taking any chances that shoppers might bypass its stores, so it offered markdowns as large as 50% at its Abercrombie business. Its Hollister chain had discounts approaching 70%. The discounts seem to have improved store traffic.

We'll need to wait for the official numbers to come out to see if Abercrombie & Fitch has been taken off the "naughty" list, but CAPS investors have already determined it deserves little more than a lump of coal this year. They've dropped it to the lowest, one-star CAPS rating, with investors like member assistryan decrying the truculent discounting stance:

Sometimes to evaluate a stock/company you simply have to take a look around. A few years ago everyone was wearing [Abercrombie] clothes. People were forking over outrageous sums of money for sweatshirt, tee shirts and other apparel. Now take a look around. I can't remember the last time I saw someone wearing [Abercrombie] clothing. Budgets are getting tighter and tighter. People just do not have the extra cash to spend. The company insists it will not reduce prices. The only way to compete in this market is discount discount discount. When they wake up and cut costs to get competitive margins will slip. This stock is just way over valued for the near term.

It could be better off to go with retailers like The Buckle (NYSE:BKE) or Aeropostale (NYSE:ARO), both of which have proven to be winners through the lean times.

Taking stock
Is Carl Icahn looking to shake things up or cash out with a bundle? The billionaire investor recently disclosed an 11% stake in Take-Two Interactive, the owner of the Grand Theft Auto video game franchise.

The game maker spurned a $26-per-share offer from Electronic Arts (NASDAQ:ERTS) last year, and its shares have cratered, falling particularly hard this month after the report that quarterly results would be dismal and its outlook for next year even worse. That set up Icahn's decision to buy big, with his cost basis around $8 a stub.

Perhaps Icahn figures he can lure Electronic Arts back to the table, where even an offer of just half its previous bid would be a lucrative payday for him. Or maybe he's looking to shake things up internally: His filing with the Securities and Exchange Commission notes that he likes to "have conversations" with management from time to time. Regardless, his view that Take-Two was undervalued is self-evident.

CAPS All-Star Hogty is putting his faith in Icahn being able to coax the one-time suitor back to the table.

Looking for a buyout here. Put real money in at this point too, so [I'm] more than a fool on this one. Research and poor projections suggest Icahn sees buyout or he wouldn't be buying this up. [Electronic Arts], we are waiting.

Gather 'round
With so many good opinions about today's top companies, why not grab a pointy paper cup from the dispenser and join us at the Motley Fool CAPS water cooler? Your input can help guide other investors to stocks with bright prospects. 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.

Sign up today for the completely free service and let us hear what you have to say about the great and almost-great companies that interest you.