This Could Be Your Next Big Winner

Be warned: I'm about to ask you a highly personal and potentially uncomfortable question.

But don't worry. In return, I'll give you the details on one stock our top analysts think could be your next big winner -- with no strings attached. All you have to do is keep reading.

Now, for the moment of truth ...
How many stocks in your portfolio are up 400% or more? One? Two? Five?

If you own any, congratulations – and feel free to sound off in the comment section below. But if the answer is zero, don't sweat it. You're certainly not alone (I'm still a few hundred percent short of my first five-bagger) – and more importantly, it doesn't mean you're a bad investor.

After all, unless you had the (insert your own noun) to buy left-for-dead companies like Ford (NYSE: F  ) or Sirius XM Radio (Nasdaq: SIRI  ) this time last year, or you've been (insert your own adjective) enough to hold game-changing companies like Amazon.com (Nasdaq: AMZN  ) over the past decade, chances are you simply haven't had the opportunity to own any really huge winners.

The odds are stacked against you
With the exception of companies like those listed above, the market's biggest winners tend to be companies most investors have never even heard of. If you don't believe me, just have a look at 10 of the top winners of the past 52 weeks ...

Stock

52-Week Gain

Market Cap

Wall Street Analysts Covering

Diedrich Coffee

8,613%

$200 million

1

Orient Paper

3,996%

$143 million

0

Select Comfort

4,003%

$446 million

7

Dollar Thrifty Automotive

4,159%

$717 million

4

Pier 1 Imports

4,760%

$843 million

5

ValueVision Media

1,046%

$130 million

0

Avis Budget Group

2,718%

$1.2 billion

5

Valassis Communications

2,152%

$1.5 billion

7

Dana Holding

5,000%

$1.6 billion

3

Netlist

3,875%

$89 million

0

Sources: Google Finance and Yahoo! Finance. All data as of March 12, 2010.

And this is no isolated incident or statistical anomaly. In fact, it holds true time and time and time again.

That's why I call these small, obscure, and overlooked stocks your shot to score big, and why fellow Fool writer Rich Greifner says they're the stocks Warren Buffett wishes he could buy.

Of course, there's one big problem ...
These stocks are small ... obscure ... and overlooked -- meaning you'll have do some serious digging to find ones worthy of your hard-earned investment dollars.

And that's exactly why Motley Fool co-founder Tom Gardner launched our Motley Fool Hidden Gems service back in 2003. You see, while all the Wall Street analysts and talking heads on CNBC are busy covering behemoths such as:

Stock

52-Week Gain

Market Cap

Wall Street Analysts Covering

GE (NYSE: GE  )

141%

$182 billion

14

Microsoft (Nasdaq: MSFT  )

92%

$257 billion

33

ExxonMobil (NYSE: XOM  )

4%

$315 billion

19

Bank of America (NYSE: BAC  )

436%

$169 billion

27

AT&T

13%

$151 billion

35

Sources: Google Finance and Yahoo! Finance. All data as of March 12, 2010.

... our Hidden Gems team is busy using $250,000 of the Fool's own money to buy expertly managed, cash-generating small caps like the one I'm going to introduce you to now.

This could be your next big winner
As anyone who experienced the great Northeastern blackout of 2003 (which left 45 million people in the dark and cost the U.S. more than $10 billion) knows, our nation's electrical grid is in sad shape -- and getting worse all the time.

In fact, the U.S. Department of Energy estimates that failings in the grid cost our economy as much as $180 billion per year. And although President Obama has already pledged $3.4 billion toward the problem (with private investors agreeing to match that amount), experts estimate that it could cost as much as $1.5 trillion to get it up to speed.

(Getting rich) off the grid
Granted, you've probably never heard of AZZ. It primarily designs and manufactures specialized parts and equipment for utilities and industrial companies -- things like bus ducts, power distribution enclosures, relay panels, switch gear, and substation services.

You can bet this division will thrive as the U.S. government begins investing billions -- possibly even trillions -- into rebuilding our power grid. Yet, thanks to the recent downturn in infrastructure spending, AZZ is selling well below what our analysts consider fair value.

Couple that with AZZ's healthy balance sheet (lots of cash, with $100 million in senior notes not payable until 2018) and solid 2.9% dividend, and you'll begin to see why our Hidden Gems team recently opened a small position and has named AZZ a "buy first" stock.

Now it's your turn
Of course, it would be a major mistake to invest based solely on what I've been able to tell you here. That's why I'd like to offer you a free 30-day all-access pass to our Hidden Gems service.

That way you can get in-depth research on AZZ, plus full coverage of every stock in the Hidden Gems real-money portfolio -- including all of their "buy first" small-cap stock picks -- and access to all the other valuable features of the members-only website. Stick with Hidden Gems if you like it -- pay nothing if you don't. To learn more, simply click here.

Austin Edwards owns shares of AT&T -- and (insert your own adjective) people tend to say he's a real (insert your own noun). AZZ is a Hidden Gems recommendation, as well as a Fool holding. Ford and Amazon.com are Stock Advisor selections. Microsoft is an Inside Value pick. Motley Fool Options has recommended a diagonal call on Microsoft. The Motley Fool is investors writing for investors.


Read/Post Comments (26) | Recommend This Article (206)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 13, 2010, at 11:20 AM, Fredlee009 wrote:

    After all, unless you had the (insert your own noun) to buy left-for-dead companies like Ford (NYSE: F) or Sirius XM Radio (Nasdaq: SIRI) this time last year

    My noun would the half a brain.

    Dishrags like you are clueless to the obvious.

    I bought at .07 cents. Easiest trigger I ever pulled, especially when your site and others said the stock was worth zero. I had over 1600% gain on those shares. Easiest 1600 % you will ever see.

  • Report this Comment On March 13, 2010, at 12:55 PM, l8gin1 wrote:

    Give me a break !

    The company just cut its 2010 outlook on February 17, 2010.

    Do we want to wait 5 years before it really goes up?

  • Report this Comment On March 13, 2010, at 4:02 PM, rogab1452 wrote:

    My Hidden Gem: SUMR ; Up, Up, Up!

  • Report this Comment On March 13, 2010, at 4:11 PM, kw1226 wrote:

    watch out for NEOP could be one of the next big sleepers....

  • Report this Comment On March 13, 2010, at 4:22 PM, kmager wrote:

    Bought SIRI at .33 just hoping to see it continue to rise. If so it will be my first good gamble in this carzy market.

    Will this be a stock that you'll have to wait a long time for big return???????

  • Report this Comment On March 13, 2010, at 4:56 PM, southernbeachguy wrote:

    Sirus has really been a Gem of a stock pick and will be for years to come. It has had over a 500% gain over the past year and gets a lot of negative press because it is kicking all of the rest of the Media's Butt. Sirus is taking their market share, so they try to bring it down thru negative articles. During the past Qt. Sirus announced a $100 million positive cash flow. With their possible expansion to Central & South America, Asia and China, Sirus should increase revenue 10X. Remember, Sirus has reoccuring monthly revenue, which means that they don't have to spend money to resell that person. Cash just keeps coming in. Sirus has an Unlimited potential to be a GIANT company.

  • Report this Comment On March 14, 2010, at 7:22 AM, ranchrfl wrote:

    Bought 5,000 APPL in my Roth IRA at $6.50 split adjusted, when Steve Jobs came back. Sold half when it hit $200 the first time and bought BAC at $21 sold at $34, back in BAC at $6.50 crapped my pants at $3.95 but held on and sold half at $13.80 to buy BUCY (THANKS CRAMER) at $24.10 it closed Friday at $64.83. All in tax free Roth.

    My bad trade bought 20,000 SIRI at OMG $2.69 (thanks Cramer:() added 42,000 at $.5289 so I'm in it at $1.28. I'm waiting to see what it looks like in 10-years.

    BTY, just ordered two iPads Friday:)

  • Report this Comment On March 14, 2010, at 1:50 PM, 1weightlosscoach wrote:

    When congress summoned the us auto makers and the ceo of ford "said when this is all over, on the other side we will be in great shape" I went to my etrade account a purchased Ford stock. All my friends said I was stupid, but knowing what the current administration had planed, it was my opinion that because Ford built trucks that would drive Ford stock higher. Soon it will be at $16/share.

    Brad

    http://www.howtoburnfatquick.com

  • Report this Comment On March 15, 2010, at 2:10 AM, paulbverizonnet8 wrote:

    I like Siri, and hope the best for them, since I own some shares. I just hope the insiders start buying it soon.

    Giordano Bruno

  • Report this Comment On March 15, 2010, at 2:12 AM, paulbverizonnet8 wrote:

    Sure would be nice to see SIRI insiders buying their stock soon. The way WEBM insiders are buying theirs.

    Giordano Bruno

  • Report this Comment On March 15, 2010, at 11:35 AM, baldheadeddork wrote:

    There's a psych doctoral thesis in these comments on SIRI...

  • Report this Comment On March 15, 2010, at 12:37 PM, topdog1203 wrote:

    Bought SIRI at 0.07

    best stock buy I will ever make... outside of CBAI at 0.008

  • Report this Comment On March 15, 2010, at 8:24 PM, tawass wrote:

    Flex at 1.94...256% to date

    Grrf at .88...270% to date

    Q at 2.33....105% to date

    Siri at .12....580% to date

    Tck at 8.64.......356% to date

  • Report this Comment On March 15, 2010, at 9:23 PM, Rustyismydog wrote:

    You mentioned a 2.9% dividend for AZZ. My research (SEC filings) doesn't show any evidence of any dividend at all. Did I misunderstand something?

    Thanks.

    Bob

  • Report this Comment On March 15, 2010, at 10:07 PM, DaytonFlyers wrote:

    I also preordered an Ipad on Friday, can't wait to surf the net while taking a dump

  • Report this Comment On March 16, 2010, at 2:59 PM, TMFAEdwards wrote:

    Hi Bob (Rustyismydog),

    I'm not sure what to tell you about the SEC filing, but here is a press release from AZZ announcing a $0.25 quarterly dividend...

    http://www.prnewswire.com/news-releases/azz-incorporated-boa...

    At this rate, it will pay $1.00 per year/per share, making the yield roughly 3.4% based on yesterday's closing price.

    Hope that helps. Thanks for reading.

    Best,

    Austin

    TMFAEdwards

  • Report this Comment On March 16, 2010, at 2:59 PM, TMFAEdwards wrote:

    Hi Bob (Rustyismydog),

    I'm not sure what to tell you about the SEC filing, but here is a press release from AZZ announcing a $0.25 quarterly dividend...

    http://www.prnewswire.com/news-releases/azz-incorporated-boa...

    At this rate, it will pay $1.00 per year/per share, making the yield roughly 3.4% based on yesterday's closing price.

    Hope that helps. Thanks for reading.

    Best,

    Austin

    TMFAEdwards

  • Report this Comment On March 17, 2010, at 12:19 AM, mikecart1 wrote:

    What I want to know is if those hidden gems above were mentioned in TMF Hidden Gems last year.

  • Report this Comment On March 19, 2010, at 5:05 AM, LatifK wrote:

    Looking up their info, they have only paid a dividend twice in its history.

    4/10/01 - paid out .08

    1/28/10 - paid out .28

    I'm not saying AZZ is not a winner, haven't done enough research on my own to have an opinion on that, but there certainly seems to be a dividend issue.

    It looks like you never did the 5 seconds of research needed to verify that fact. Is that the level of research that goes into the Hidden Gems service?

  • Report this Comment On March 19, 2010, at 2:46 PM, TMFOpie wrote:

    Hi Rusty and LatifK,

    AZZ just recently announced they are paying a 25 cent dividend. So the 2.9% yield comes from that $1 per year dividend payment divided by the $34 stock price = 2.9%. The assumption with AZZ and the cash flows it generates is that this 25 cent dividend will turn into a yearly payment ($1). So yes, we're in a turn around, wait-and-see time with AZZ (they did just nick down guidance which sent the stock down -- it's since recovered 20%), but it's one we're comfortable with at Hidden Gems.

    Fool on,

    Andy

    TMF HG co-advisor

  • Report this Comment On March 19, 2010, at 5:22 PM, Winnerfrommidlan wrote:

    Hi Folks,

    I have 3 stocks in my portfolio that are up over ten fold. Healthcare Services Group thats up by factor of 20 in 14 years, Corning, which I bought at $2 at the bottom of the Tech crash is up 10 fold and Netlist which I bought a year ago when noone wanted it is also up by factor of 10.

    Bernie

  • Report this Comment On March 19, 2010, at 7:29 PM, TMFAEdwards wrote:

    Hey Bernie,

    Congrats on all three of your big winners! Any insights you'd want to share with us about why you chose to buy those stocks when you did?

    Thanks for reading.

    Austin

  • Report this Comment On March 19, 2010, at 7:31 PM, TMFAEdwards wrote:

    Hi Bernie,

    Congrats on all three! Any insights you could share with the rest of us on why you bought those particular stocks when you did? Or perhaps any stocks in today's market that you think look similar to these past winners?

    Thanks for reading.

    Best,

    Austin

  • Report this Comment On March 19, 2010, at 8:14 PM, phoebe44 wrote:

    Well, I have two 5 baggers, another 6 up over 250% each, another 5 up over 100% each. I was one of those bleep bleep idiots who scooped up stocks like crazy last year. My broker would laugh when I called. He isn't laughing now - asking me what I think now. How many of these beauties were from Motley Fool??? I owe half my good fortune to Motley Fool!! -- a whopping 8 - thank you from the bottom of my heart, Motley Fool!

  • Report this Comment On March 19, 2010, at 8:14 PM, phoebe44 wrote:

    Well, I have two 5 baggers, another 6 up over 250% each, another 5 up over 100% each. I was one of those bleep bleep idiots who scooped up stocks like crazy last year. My broker would laugh when I called. He isn't laughing now - asking me what I think now. How many of these beauties were from Motley Fool??? I owe half my good fortune to Motley Fool!! -- a whopping 8 - thank you from the bottom of my heart, Motley Fool!

  • Report this Comment On January 24, 2012, at 2:30 PM, chuckdog111 wrote:

    In and out of 8x8 (eght) for way too long, but in for good since 2009. the comp. has been a motley fool favorite for a while.

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