10 Stocks to Buy

Which are the best stocks to buy now? Here's what our community of 6,900 at Motley Fool CAPS says:

Company

Total Ratings

Bullish Picks

Bull Ratio

Honda Motor
(NYSE: HMC  )

127

127

100%

Portfolio Recovery Assoc.
(Nasdaq: PRAA  )

533

530

99.4%

Middleby (Nasdaq: MIDD  )

484

480

99.2%

Berkshire Hathaway

234

231

98.7%

Coventry Health Care

143

141

98.6%

American Int'l Group
(NYSE: AIG  )

112

110

98.2%

Blackboard
(Nasdaq: BBBB  )

308

302

98.1%

PetroChina
(NYSE: PTR  )

82

80

97.6%

Natus Medical
(Nasdaq: BABY  )

163

159

97.5%

ViroPharma

114

111

97.4%

Data current as of Sept. 25, 2006.

No doubt this is a rather unscientific table, and CAPS is a new service, so our newsletter recommendations are likely overrepresented. But all that aside, this is a pretty good group of companies to take a closer look at.

Snorting bulls run strong with each of these stocks. Consider this "pitch" -- a short investing thesis exposed for all to see -- for biotech ViroPharma from CAPS player PrincetonAl:

Check out the P/E ... [ViroPharma] is priced as if generic competition is a given. Any significant delays that allow its pipeline to mature, or any stumbles will allow it to rebound significantly from where it is, $13-$15, allowing for a 40%+ gain ...

Or how about this highly recommended pitch for Natus Medical from fellow Fool Tim Hanson:

Like Blackboard, Natus Medical is building a burgeoning monopoly in its industry. That industry is medical devices for newborn testing. Like the old razor/razor blade analogy, Natus not only is penetrating more and more hospitals with their equipment, they also then supply the various parts and pieces to make them work every day. I love to find small companies that are on the verge of controlling their niche, and I think that's going to be the case here. David Nierenberg of D3 Funds also owns a significant stake in Natus Medical, and that's just one more thing to like.

Best of the best
Surely both of these stocks deserve their fans, but neither inspires the passion that Honda does. Our CAPS score leader, Russell Carpenter, who is both a financial analyst and a member of the Motley Fool Hidden Gems team, best sums up the bull case for the shares:

Honda largely steered clear of the bigger, heavier, V-8 engine SUV craze, and is beginning to see the benefits of that decision. Honda is also making a foray into the ultra light jet market, and given their history of innovations -- they actually beat Toyota (NYSE: TM  ) to market with a hybrid car, the Insight -- I'm liking their chances.

Motley Fool Rule Breakers team member Daniel Rubin, a comedy writer in Hollywood when not answering investing questions, adds the punch line:

... I bought my last Honda for 17K and sold it a year later for 16K. These things have incredible value. With General Motors and Ford as national embarrassments, Honda should do just fine.

It's also worth noting that, according to Yahoo! Finance, Honda boasts the best gross margin in the auto industry yet trades for just 11 times projected earnings. Toyota, by contrast, trades for 13 times projected earnings. Nice.

Earn your Fool cap!
Are these really the best stocks in the world? Which are your five-star winners? Get in the game now and tell us what you think. Or, if you'd rather, choose one of the more than 1,200 stocks that have yet to earn a star rating in CAPS, including auto-parts supplier American Axle (NYSE: AXL  ) and pasta maker American Italian Pasta (NYSE: PLB  ) . Click here to rate either of them now. It's entirely free. Your Fool cap is waiting.

Blackboard, Middleby, and Portfolio Recovery Associates are allMotley Fool Hidden Gemsportfolio companies. Together, these and dozens of other picks made by Tom Gardner and Bill Mann are walloping the market by more than 17%. Get the skinny on all the stocks behind those generous returns with a 30-day all-access pass. It's completely free. Click here now to get started.

Fool contributor Tim Beyers has 33 picks in his CAPS portfolio, including Oracle, which he believes is poised for a double. Think he's wrong? Get in the game and add your own rating. Tim owns shares of Berkshire Hathaway and Oracle. Get the skinny on all of Tim's stock holdings by checking his Fool profile. The Motley Fool's disclosure policy always beats the average.


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