Drink In These Top Stocks

Whether it's the corporate lunchroom, your cubicle, or the local watering hole after work, there are regular places we gather to discuss news, sports, or -- if you're like us -- stocks. Here at Motley Fool CAPS, we gather around the virtual water cooler daily to rate stocks and delve into their merits as investments.

In our CAPS community, 160,000 members give the thumbs-up or thumbs-down to about 5,400 stocks as they seek businesses they think will outperform the market. Below, we'll take a look at some of the most popular and talked-about stocks in CAPS and examine whether you think they'll continue their winning ways.

Of course, just because a lot of investors find these stocks interesting doesn't mean they're an automatic addition to your portfolio. You still need to do more research to find out if they're interesting because they're set to take off or because they're ready for a trip to the cellar.

A tall drink of water
If the government pulls "too big to fail" out from under Citigroup (NYSE: C), Bank of America (NYSE: BAC), and Wells Fargo through the reform measures wending their way through Congress, the ratings agencies say, they  would immediately become a much riskier bunch of investments. Although it's likely that Wells Fargo, Citi, and Goldman Sachs (NYSE: GS) would take on less-risky lending habits, losing that government backstop is enough for the ratings agencies to lower the banks' ratings a couple of notches.

With Europe in crisis, however, and Spain seizing a bank over the weekend, the jitters of cross-contagion remain. Wells Fargo is troubled by all that's going on, so CAPS member adamhu is among those who see an opportunity.

Normalized Earnings around $40B Pre-provision Pre Tax
Net earnings attributed to common share holders would be roughly $21B, making it more around $4 per share.
$45 price target, stable business, low risk profile during non-recessionary economic environment.

Something to build on
With homebuilding confidence on the rise, Home Depot is  saying it's optimistic about the year ahead. That didn't stave off those who believe that the guidance from rival Lowe's (NYSE: LOW), which came in below Wall Street's expectations, was closer to what we could expect.

In its latest quarter, Big Orange increased profits by 41% as sales rose 4.3% to $16.9 billion. While domestic same-store sales also improved, the concern is that the government artificially drew in homebuyers with its first-time tax credit, and that is what fueled demand for do-it-yourself supplies. Now that the program has ended, Home Depot has to show it can build on the success.

Highly rated CAPS All-Star liamhahn says he's an employee and that Home Depot under its new CEO has made the changes needed to capitalize on the bullish signals in the market.

Over the last year the increase in customer traffic, and the feedback I get from customers about our improvements has been palpable. Our CEO Frank [Blake] is universally appreciated at all levels of the company, in contrast to [Robert] Nardelli who was at best merely tolerated. Frank's focus on the Big-3 (Customer Service, In-Stock, and Store Appearance) has led to an enormous improvement over the last several years.

For CAPS member chk2595, there's just not enough evidence that the confidence and tone management projects has trickled down to the store employee.

The stores sell the [same] items but the stores and their help have different atmospheres. Lowes people locally are helpful upbeat, positive [about] their store, and their ability to help the customer get what they want.

When the dollar's a downer
For CAPS member hybridinvestor, some companies are an otherwise solid business, but macroeconomic events impede their ability to profit over the near term. 3M, with two-thirds of its revenues coming from outside the U.S., might be one of the companies that have a hard time reconciling the ravages of international currencies.

Near-term pan on large U.S. multi-nationals as they face headwinds of a strengthening dollar making overseas profits less valuable. Also using these pans to measure any sort of expected near-term pullback to also find entry points for my "source of funds" big cap trades I will do when they sell off enough.

Because 96% of the 4,000 CAPS members rating the conglomerate pick it to outperform the market, it seems they're willing to wager it will overcome the turbulence. Head over to the 3M CAPS page and tell us whether the euro will affect results.

Gather 'round
With so many good opinions about today's top companies, why not grab a pointy paper cup from the dispenser and join us at the Motley Fool CAPS water cooler? Your input can help guide other investors to stocks with bright prospects. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page.

Sign up today for the completely free service and let us hear what you have to say about the great and almost-great companies that interest you.