Winning stocks with impressive long-term returns can do more than tantalize investors. They might also guide us to the next great stock. For example, coffee roaster and retailer Starbucks
Finding the tail on this coat
From its earliest days as a regional coffee chain, investors and analysts have expressed doubts about whether Starbucks could convince customers to routinely pay premium prices for upscale coffee. But the company has proven that even a more reasonably priced cup of joe from ubiquitous competitors McDonald's
If we can nail down some companies profiting from, or outright mimicking, the premium brand model that Starbucks created, we might find a hidden treasure worthy of investment. With a giant like Starbucks, investors typically follow the conventional wisdom, looking only for direct suppliers or partners. Obvious choices here include partnerships with Sony
Tagging along with CAPS
With CAPS, investors can look through Starbucks' tag list for other companies sporting similar attributes. For instance, Starbucks falls under tags such as Specialty Eateries, Top Brands 2006, and Rule Breakers Universe. In addition, the comments CAPS investors leave regarding rated companies can sometimes lead to similarly attractive investments, even those with little or no direct connection to Starbucks.
These CAPS resources could point investors to companies like burrito magnate Chipotle Mexican Grill
CAPS also turns up another interesting restaurant concept in Panera Bread
Of course, plenty of coattail investments have proved to be mere copycats, ultimately flopping for investors. That's why CAPS is best used as a research tool, not a device to pick stocks for you. Rather than taking anyone else's recommendation, investors should always perform their own due diligence. But you can't beat the information and resources for the price -- namely, 100% free.
Is there another stock you know about that has Starbucks' wind in its sail? Give your own opinion in Motley Fool CAPS.
Chipotle's burrito bravado led to its selection by the Motley Fool Hidden Gems newsletter (and the Rule Breakers newsletter, too). To see what other companies make up Hidden Gems' market-beating roster, check out a free 30-day trial.
Fool contributor Dave Mock has never worn a coat with tails; he prefers the waiter style. He owns shares of Starbucks. Dave is the author of The Qualcomm Equation. Starbucks is a Stock Advisor recommendation. The Fool's disclosure policy is often imitated but never duplicated.