Tomorrow's Monster Stocks

Stocks climbing to 10 times their original price are rare breeds -- but they're not impossible to find. Especially when you have Fools for friends.

The market's best stocks include companies that have risen dozens of times in value by taking advantage of the market's weaknesses. These aren't penny stocks; they're viable companies with sound business prospects that are achieving phenomenal returns. Finding just one or two of these monstrously successful firms can help you establish a winning portfolio.

Stalking the monster
To find tomorrow's winners, we've enlisted the help of more than 170,000 monster trackers at Motley Fool CAPS. We've compiled a list of the most successful CAPS members, dubbed All-Stars, whose picks have doubled, tripled, or even quadrupled in price. Then we've plucked out some of their recent picks for stocks they find equally promising.

Score is how many percentage points that pick is beating the S&P 500.

Of course, this is not a list of stocks to buy -- or, for those monster stocks that our CAPS All-Stars have already found, to sell. Just consider them starting points for your own further research of extreme buying opportunities.

In search of Bigfoot
It's not that the big markets of the U.S., Europe, and even China have all been conquered, or that we need new regions are to explore. It's just that smaller, out-of-the-way venues offer up enticing opportunities for growth, too. If you put together a large enough string of them, it can add up to some real money.

That seems to be happening a lot more frequently in telecom these days. For example, Acme Packet shares surged higher last week, after the company announced a deal to provide its session border control technology to Sri Lankan Internet telephone leader Etisalat Telecommunications. No financial details were announced, and Sri Lanka isn't exactly the hottest emerging market, but growth off the beaten path is becoming more popular.

Acme's news followed similar dealmaking by Motricity (Nasdaq: MOTR), a mobile carrier-sponsored data platform provider, which announced agreements with Malaysia's largest 3G operator, Celcom, and India's Reliance, the subcontinent's biggest private-sector information and communications company.

As CAPS member centertao succinctly puts it, "The Internet has much growth ahead in the developing world." We should probably expect to see a lot more such deals being inked.

Why not head over to the Acme Packet CAPS page, and tell us why it will still be able to dial up growth?

A capital idea?
When some of the smartest investors around coalesce around an otherwise unpopular idea, it may be time to take notice. Consider that as Annaly Capital Management creates a lending unit that will focus on mortgage bankers previously "left out" of the market, Bill Ackman at Pershing Square Capital Management is also suggesting that now is the best time to invest in housing.

That's somewhat surprising, really, since noted economist Nouriel Roubini says the real estate market "for sure" will double-dip, with as much as $1 trillion more losses in the making. Furthermore, the market analysts at Hedgeye say housing isn't as cheap as Ackman makes it out to be.

What sets Annaly apart? Up till now Wells Fargo (NYSE: WFC), Bank of America, and JPMorgan Chase (NYSE: JPM) have crowded out the small mortgage originators. Analysts expect that by targeting those in the $5 million to $10 million net worth range, Annaly's new division may turn profitable very quickly.

Regardless of how that plays out, however, CAPS member eleev1659 believes Annaly's main business of buying agency-backed mortgages will continue to serve it and investors well:

they borrow money at low interest rates and buy higher yielding mortgages. As long as interest rates remain low, they will have great profits and pay high dividends. They buy U.S. government-backed mortgages.

Only you can decide whether Annaly is right for your portfolio. Add it your watchlist, and get all the Foolish news and analysis about the stock aggregated in one place.

Going with the flow
Like an engine without oil, pump and valve maker Flowserve saw its stock grind to a halt and fall apart after its most recent earnings report. While its numbers beat estimates, Flowserve posted revenue well below expectations. Governments around the globe that were previously pumping money into their infrastructure as a way to spend their way out of the recession have begun to curtail those investments. Investors undoubtedly felt that without stimulus to grease the gears, Flowserve's growth engine would seize up.

The stock has recovered most of the lost ground since then, perhaps as investors realize that Flowserve is equal to the task of continued growth as envisioned by the likes of peers ITT, Mueller Water (NYSE: MWA), and Crane.

Roughly 98% of the CAPS members who've rated Flowserve believe it will outperform the market; obviously, they think it's still a well-oiled machine. Join them on the Flowserve CAPS page, and let us know whether it will seize the day.

A chance for scary growth
It takes more than a few All-Star picks and a quick pitch to make buy or sell decisions. Start your own research on these stocks on Motley Fool CAPS, and find other opportunities with monster potential.