It seems that a day can't go by anymore without some gloomy economic news sending the price of gold -- and companies profiting from it -- soaring. But I've found investments from another sector that are beating the pants off gold stocks -- and I know where you can find out more about them.
Would the real hot stocks please come forward?
The 5,500 stocks that more than 110,000 Motley Fool CAPS community members have rated include descriptive "tags" that group them with other companies sharing similar qualities -- a country of origin, a sector, or an end product, for example. Clicking the Gold tag pulls up a list of 84 stocks that have beaten the market but still lost more than 3% in the past year.
But CAPS tags can lead you to stocks that have outpaced even the near-term returns from the gold group: Missouri. That's right. This "Show-Me State" group consists of 16 companies that have shown investors outstanding returns, with more than a 13% average gain in the past year.
Each group has its share of winners and losers, of course, but CAPS can be a great resource for zeroing in on potential opportunities in each area.
From macro to micro
You can sort tag groups by their CAPS ratings, from one to a maximum five stars, and then see which players -- from Wall Street to Main Street -- are bullish or bearish on a company, and why.
For instance, here are a few of the stocks in the gold group:
|
Company
|
CAPS Rating (Out of 5)
|
1-Year Performance
|
|
Yamana Gold (NYSE: AUY )
|
*****
|
8.7%
|
|
Northgate Minerals (AMEX: NXG )
|
*****
|
(23.4)%
|
|
Barrick Gold (NYSE: ABX )
|
****
|
30.2%
|
|
Anglo American (Nasdaq: AAUK )
|
****
|
(15.8)%
|
Source: Motley Fool CAPS, as of July 24.
Now, based on the interest in the CAPS community, here's a sampling of Missouri stocks that investors may want to consider.
|
Company
|
CAPS Rating
|
1-Year Performance
|
|
Emerson (NYSE: EMR )
|
*****
|
3.7%
|
|
Anheuser-Busch (NYSE: BUD )
|
****
|
39.7%
|
|
MEMC (NYSE: WFR )
|
****
|
(23.8)%
|
Source: Motley Fool CAPS, as of July 24.
Emerson
With 51 consecutive years of dividend increases, Emerson Electric has given investors a way to survive and thrive in this crazy market. An investment in Emerson in 1982 would currently be returning more than 32% annually on the dividends alone, and that's on top of the hefty 1,300% appreciation in the stock. These types of returns come from consistent profits that result from shrewd management, as evidenced by Emerson's decision to walk away from a bid it made for Chloride, Europe's largest maker of backup power supplies. While Chloride argued for a higher price, Emerson disagreed and opted to move on rather than pay a higher premium. With its long track record of success, 98% of the 847 CAPS members rating Emerson expect it to outperform the market.
Anheuser-Busch
After refusing an earlier bid of $65 per share from Belgian brewer InBev, Anheuser-Busch finally agreed to a $70-per-share offer that prices the King of Beers at $52 billion. If the buyout is completed, InBev will have control of Anheuser-Busch’s 48% market share in U.S. beer sales. If something scuttles the deal, A-B will fall back on its current operations, where it reported a 1.8% year-over-year increase in second-quarter profit of $689 million, and a 4% increase in net sales of $4.7 billion. The company remains optimistic on the remainder of the summer selling season and its plan to cut $1.5 billion in costs to boost profit. Today, 92% of the 1,890 CAPS members rating Anheuser-Busch predict that it will outperform the market.
MEMC
MEMC has been riding a hot trend lately -- supplying silicon wafers to solar-cell companies. In an industry with significant barriers to entry for new competition, tighter silicon supplies have increased the demand for MEMC’s products. But MEMC just announced disappointing second-quarter earnings results, gave a cautious outlook for the third quarter, and lowered 2008 guidance. Some analysts like the stock even more at its lower price, though: Profits are expected to grow by 27% annually going forward. Many CAPS members like MEMC, too, with 1,519 of the 1,579 rating the company expecting it to outperform the market in the future.
Before you buy ...
Of course, what's happened in the past is no indicator of where investors should be putting their capital now. But the underlying reasons behind dramatic run-ups in stocks or groups of stocks can clarify trends that may significantly affect investments. Just make sure to do your own due diligence rather than simply follow crowds or individual recommendations.
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