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 discover the 10 best stocks of the past decade. But I'm more interested in the tools that can help me evaluate tomorrow's greatest companies.
Motley Fool CAPS offers a variety of resources to aid Fools in finding tomorrow's leaders. Our 160,000-member community is full of investors helping each other beat the market.
We'll enlist CAPS to screen for companies recently punished by investors, then get the story behind some of its more highly rated stocks. CAPS' nifty screener will help us find stocks with:
- A market cap of at least $500 million.
- A long-term debt-to-equity ratio of less than 0.5.
- A share price at least 30% below its 12-month high.
- A three-year revenue growth rate of at least 20%.
- A price-to-earnings ratio of less than 25.
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
Below is a sample of stocks our screen returned.
|
Company |
Revenue Growth Rate,
|
% Below 12-Month High |
CAPS Rating
|
|---|---|---|---|
|
Yingli Green Energy |
119.2% |
33.2% |
**** |
|
Shanda Interactive |
53.1% |
30.5% |
**** |
|
Synaptics |
25.3% |
30.5% |
**** |
Data and star rankings from CAPS as of April 1.
Yingli Green Energy
Shares of Yingli started off on the wrong foot this year -- trending down, that is -- and the company recently posted a fourth-quarter loss. Still, many CAPS members have maintained their bullish call as Yingli posted a 44% year-over-year jump in quarterly revenue and expects stronger shipments in 2010.
While the solar subsidy situation in Germany has rattled some other solar companies, Yingli expects to grow in the German market and is also taking share in other markets. Yingli is also well positioned for future growth; new capacity expansion projects have the company inching its capacity closer to China's largest photovoltaic producer, Suntech Power
Shanda Interactive
Shanda Interactive's shares were punished after its latest earnings release, despite growth in earnings and revenue. Heavy government involvement in the gaming sector and a weak first-quarter outlook from subsidiary Shanda Games
Shanda is pushing down several new avenues for ways to boost business, such as its partnership with China Network Television to develop a variety of entertainment products. Investors also like the backstop of the more than $1.6 billion in cash on Shanda's balance sheet, as a solid 96% of the 932 CAPS members rating Shanda Interactive see it as a market-beating investment.
Synaptics
As competition in the smartphone market continues to pit device makers against each other, many CAPS members like touchscreen technology maker Synaptics as a way to play the larger trends. Synaptics has faced stiff competition of its own, though, from others like Cypress Semiconductor
This leads CAPS members to think Synaptics has the right stuff to lead this revolution. As such, nearly 96% of the 791 CAPS members rating Synaptics are bullish.
Let 160,000 members be the jury
The collective wisdom of a huge pool of investors can help give context to a page of numbers from a stock screen. But individual investors are still the best judges of what to do with their own money. Fools should always perform their own due diligence.
Happily, it's easy to chime in with your own opinion. If you agree that these companies present dream opportunities -- or see more of a nightmare instead -- simply scroll down and add your thoughts in the comments box.
