Finding Stocks at a Fever Pitch

The collective power of thousands of investing minds is the driving force behind Motley Fool CAPS, a database and community of more than one hundred and ten thousand investors: professionals, novices, and every level in between.

One of the service's unique features is the ability to not only rate a company on whether you think it will outperform the market, but to express why you think it will, in as much detail as you want. These analyses, or "pitches," can be as simple as "This stock has a low P/E ratio," or as complicated as a multipage, footnoted thesis. In the overall assessment of the stock, a pitch is another data point to consider.

Throwing strikes
Useful analyses are those that give salient details about a company and its prospects -- on both the bull and the bear sides -- and the best ones earn recommendations. Not everyone can become famous picking stocks and detailing their reasons, but we call those who merit the most recommendations for their analyses our "pitch-writing superstars." Let's look at these investors and some of their best recommendations to get a sense of what makes up strong analyses and winning investing.

Not only is reddingrunner a top pitcher with 386 recommendations for what he has written, he's also a highly rated All-Star, with a 95.25 player rating. Here are a few of his most recent stock picks.

A Herculean effort
The analogy between Hurco Companies, which makes machine-tool and related software, and the Roman god Hercules has been easily drawn, although the recent stock performance of the Motley Fool Hidden Gems recommendation belies the comparison. The share price had risen a lot over the past few years as the company's advanced metal-cutting machines gained broad acceptance in the marketplace. But it stumbled in the last quarter as costs and competitive pricing pressures weighed on margins, undoubtedly as rivals like Hardinge (NASDAQ:HDNG) tried to steal market share.

CAPS All-Star MJKpayday finds that there is still a world of opportunity available to Hurco, and considering its low valuation, that makes it an investment as attractive as Venus.

Hurco is a well run company that makes machines that make tools that they sell to other companies so they can make more tools. Sounds confusing? What's not confusing is the opportunity for growth and their cheap share price. Asia still remains an untapped area for Hurco, while Europe remains strong, and in the US, success will be hitting last years numbers. With a [price to book value] of 1.85 and a tangible price to book value of only 8 there's room for multiple expansion at any glimmer hope for improved business.

Envisioning profits
Another industrial manufacturer that is benefiting from European exposure is Eaton, which makes fluid power systems and electrical systems for the automotive, aerospace, and agricultural sectors. Admittedly, carmakers might be trying to stall growth, but Eaton's other divisions are more than compensating for the lack of get-up-and-go from cars and trucks. While General Electric (NYSE:GE) recently said its diverse manufacturing businesses were tripped up by the economy, Eaton has powered forward. Still, like Hurco, its shares suffered after guidance that included concerns about the immediate future.

CAPS All-Star falcon2382 sees international diversification as the key to Eaton's future.

Solid company. Consistent dividend since 1987. The stock has taken a huge hit in response to the machine and automobile industry as a whole. ... Yet, Eaton ISN'T the Auto Industry. It is the "let's make the machine and auto industries more efficient"-Industry. ... it currently sits at a tremendous price and volume support level with an incredible track record on the part of management and general market share growth during the past 15 years. Eaton has grown itself into a very important U.S. company and with its expansion overseas (three acquisitions in Europe recently completed and several others in Asia under way) they are getting ready for Global Expansion Part II. This is a great time to get invested in [Eaton], even if it continues to fall an additional 10%-15% from current levels; just let the dividends buy the stock at a lower price, you'll be happy you did five years from now.

Inside pitches
Now, just because an All-Star investor writes a recommended pitch for a company is no reason to go out and buy and sell those stocks. You still need to perform your own due diligence. But it's worth considering what they've said as you make your decision.

A Foolish stance
Step up to the batter's box of Motley Fool CAPS and make your opinions known. Because CAPS is a completely free service, throw as many pitches as you like at the stocks of your choice. You'll be helping your fellow investors make better decisions..