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 see what the 10 best stocks of the past decade were. But for my part, I'm more interested in the tools that can not only help me find new stock ideas, but also have the resources necessary to evaluate tomorrow's greatest companies.
There is a tool that offers a variety of resources to help with finding tomorrow's leaders: Motley Fool CAPS, a 120,000-member community of investors helping each other beat the market.
We've enlisted CAPS to screen for growth stocks and get the story behind some of the more highly rated companies. CAPS' nifty screener will help us find stocks with:
- A market cap of at least $500 million.
- A trailing three-year earnings-per-share growth rate of at least 25%.
- A trailing three-year revenue growth rate of at least 30%.
- 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
Here's a sampling from the list of stocks our screen pulled up today.
|
Company |
Revenue Growth Rate, Past 3 Years |
CAPS Rating (out of 5) |
|---|---|---|
|
NRG Energy |
32.8% |
***** |
|
Suntech Power |
121.7% |
**** |
|
Ctrip.com |
50.2% |
**** |
|
Hansen Natural |
43.4% |
**** |
Data and star rankings from CAPS. All data as of Dec. 5.
NRG Energy
As the second-largest power player in Texas, NRG continues its pursuit of new technologies to stay ahead. It’s working on a wind farm joint venture with BP
Warren Buffett is getting a little greedy, too, and recently increased his ownership in NRG. More than 98% of the 397 CAPS members rating NRG agree with him and expect the company to outperform the market.
Suntech Power
Solar player Suntech Power has a strong following in CAPS, where many members are bullish on the company's long-term potential despite the near-term pressures in the solar industry. Those pressures include some recent delays in Suntech's customer orders in response to the shift in credit markets. Suntech has cut back on 2009 expansion plans; instead, it plans to upgrade existing production lines and increase efficiencies. Decreasing raw-materials costs may also work in its favor as the company becomes a more efficient operator. Today, nearly 97% of the 4,133 CAPS members rating Suntech Power expect it to beat the market.
Ctrip.com
Even though leading Chinese travel website Ctrip.com has met or exceeded Wall Street's profit expectations for the past seven consecutive quarters, a more cautious outlook recently has the stock at bargain prices worthy of Black Friday. A roughly 60% pummeling in the past six months has been doled out to the company, and it is looking for net revenue to grow "only" 5% to 15% in the fourth quarter.
But Ctrip.com holds $207 million in cash on its balance sheet, giving it a good cushion in the threatening global economy. This also positions the company well to take advantage of others' weakness, one of several positive aspects that have more than 96% of the 4,354 CAPS members rating Ctrip.com bullish on its prospects.
Hansen Natural
In its most recent quarterly earnings results, Monster Energy drink maker Hansen Natural increased its cash position to more than $256 million thanks to 15.2% sales growth that exceeded growth in costs. While beverage makers Coca-Cola
Let 120,000 investors be the judge
The collective wisdom of a huge pool of investors can help give context to a page of numbers developed through a stock screen. But even with an entire community of qualified opinions acting as the judge, individual investors are still the jury and should perform their own due diligence.
Run your favorite factors through the Motley Fool CAPS screener. It's totally free, and we think you'll like the results.
