5-Star Stocks Poised to Pop: Insteel

Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, steel products maker Insteel Industries (Nasdaq: IIIN  ) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Insteel's business and see what CAPS investors are saying about the stock right now.

Insteel facts

Headquarters (Founded)	Mount Airy, N.C. (1958)
Market Cap	$157 million
Industry	Building products
Trailing-12-Month Revenue	$216.5 million
Management	CEO H. O. Woltz, III (since 1991) CFO Michael Gazmarian (since 1994)
Return on Equity (Average, Past 3 Years)	6.6%
Cash/Debt	$44.2 million / $0
Dividend Yield	1.3%
Competitors	Nucor (NYSE: NUE  ) Gerdau (NYSE: GGB  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 95% of the 250 members who have rated Insteel believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars G311 and facwinjeff42, both of whom are ranked in the top 15% of our community.

This past summer, G311 urged Fools to pounce on Insteel's slumping price:

[T]he recently plummeting share price is now too low to resist! And on an incredibly basic level, the company's in a high supply/demand long-term business -- steel wire reinforcing products for concrete construction applications. Tell when the world will stop needing that.

In fact, Insteel's shares are down roughly 30% over the past three months, while the majority of big steel stocks are up over the same time frame. But with a lower leverage ratio (1.2) than rivals Nucor (1.8) and Gerdau (2.4), as well as other steel plays like ArcelorMittal (NYSE: MT  ) (2.1), U.S. Steel (NYSE: X  ) (3.5), and AK Steel (NYSE: AKS  ) (5), Insteel seems like a relatively safe turnaround pick. Of course, with as many positives as CAPS member facwinjeff42 highlights, Insteel could potentially be a long-term multibagger, to boot:

1) [Insteel] IS BORING. Fantastic attribute. Let's sample the good: One of Insteel's three core strategies is "operating as the lowest cost producer" of steel wire reinforcing products for concrete construction applications.

2) NO DEBT. ... Now the cash flow is even more sweet and tantalizing. There's a solid history of profiting while limiting liability and expeditiously paying off debt.

3) WORLD DOMINATION. They're doing what they said they'd do, by executing on their other two core strategies: achieving leadership positions in their markets and expanding their geographic footprint.

4) SECTOR IS DEPRESSED. ... Construction is weak, of course, pending general economic recovery. When the pendulum swings back up, as it always does eventually, business will boom. It has to, because...

5) DEMAND IS ENDLESS. They make stuff that will need to be used by lots of big companies for the forseeable long-term future.

What do you think about Insteel, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!