4-Star Stocks Poised to Pop: Universal Display

Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Universal Display (Nasdaq: PANL  ) , which develops organic light-emitting diode (OLED) technologies, has earned a respected four-star ranking.

With that in mind, let's take a closer look at Universal Display's business and see what CAPS investors are saying about the stock right now.

Universal Display facts

Headquarters (Founded)

Ewing, N.J. (1985)

Market Cap

$719 million

Industry

Electronic components

Trailing-12-Month Revenue

$17 million

Management

CEO Steven Abramson (since 2008)

CFO Sidney Rosenblatt (since 1995)

Return on Equity (Average, Past 3 Years)

(25.2%)

Compound Annual Revenue Growth (Over Past 3 Years)

13.8%

Cash/Debt

$63 million / $0

Competitors

Eastman Kodak (NYSE: EK  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 96% of the 851 members who have rated Universal Display believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars DarthMaul09 and TMFBreakerTAllan, both ranked in the top 2% of our community.

Earlier this month, DarthMaul09 wrote that Universal Display "has remained a bit of a speculative stock with great potential but poor earnings." Our CAPS All-Star continues: "I believe that it remains a good speculative bet. ... Assuming the world doesn't come to an end, this stock should be much more valuable in 2 to 5 years. Can you wait? If yes, buy."

Despite its market-bucking 54% price run in 2010, our CAPS community continues to tap Universal Display as the purest path to OLED display riches. While rival Kodak, which patented the original fluorescent OLED technology in 1987, and DuPont (NYSE: DD  ) are also heavy hitters in the space, their big size and diversified nature don't give Fools quite enough bang for their investment buck. But with a market cap of just over $700 million and an All-Star roster of consumer electronic licensees that include Samsung and LG Display (NYSE: LPL  ) , members like TMFBreakerTAllan think Universal Display is, by far, the best way to bank on OLED's bright future:

[Universal] Display is a central player in OLED display and lighting technology. The power saving advantages of OLEDs will definitely become a part of the mobile smartphone and computer market for this reason alone. Universal has slowly increased revenues from commercial sales and from developmental contracts over the past several years. I expect that slow increase to continue in the next few years, but when OLED tech becomes the defacto display for laptops, tablets, and netbooks, those revenues will explode.

What do you think about Universal Display, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara doesn't own a position in any of the companies mentioned. Universal Display is a Motley Fool Rule Breakers recommendation. The Fool's disclosure policy always gets a perfect score.


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