Investors are always hunting for the next big stock -- the dream stock whose price increases several times over when the market finally discovers it. It's easy to look back and see what the 10 best stocks of the past decade were. But I'm more interested in the tools that can not only help me find new stock ideas, but also have the resources necessary to evaluate tomorrow's greatest companies.
There is a tool that offers a variety of resources to help find tomorrow's leaders: Motley Fool CAPS.
We'll enlist CAPS to screen for top technology stocks and get the story behind them. CAPS' nifty screener will help us find tech stocks with:
- A market cap of at least $100 million.
- An average annual growth rate of at least 20% for the past three years.
- A price-to-earnings ratio of less than 25.
Then we'll tap the collective intelligence of our 110,000-plus CAPS members to see whether these companies present real opportunities -- or whether the numbers fail to tell the true story.
Opinions with the numbers
Here's a sampling from the list of stocks our screen pulled up today.
|
Company |
Annual Revenue Growth Rate, Past 3 Years |
CAPS Rating (out of 5) |
|---|---|---|
|
Sigma Designs (NASDAQ:SIGM) |
96% |
***** |
|
Vimpel Communications (NYSE:VIP) |
49.7% |
***** |
|
VASCO Data Security (NASDAQ:VDSI) |
43.9% |
***** |
|
Quality Systems (NASDAQ:QSII) |
28.4% |
***** |
|
NETGEAR (NASDAQ:NTGR) |
20.9% |
***** |
Data and star ratings from CAPS. All data as of July 11.
Sigma Designs
Since its peak in December, Sigma's shares have been in a tailspin, thanks to a first-quarter earnings report that was less than inspiring. With its valuation down to around a 6.9 earnings multiple, insiders at Sigma Designs are taking the opportunity to buy into shares of the media chip maker. With the sale of IPTV set-top boxes expected to surge, there should be high demand for Sigma's chipsets used in the devices. The large market opportunity and cheap price has many CAPS members overlooking the recent earnings miss, with 97% of the 1,361 members rating the company expecting it to outperform the S&P.
Vimpel Communications
Russian cell-phone carrier VimpelCom has been growing its mobile subscriber base rapidly since listing on the New York Stock Exchange in 1996 and now counts 52 million subscribers. The stock has dropped recently as the company showed signs of losing market share in some markets, even though it reported that first-quarter profits more than doubled. With a P/E of just less than 15 and per-share profits expected to increase 20% in 2009 -- nearly double that of Verizon's (NYSE:VZ) -- many CAPS members think VimpelCom is poised to outrun the market. At least that's how 98% of the 1,214 members rating the company have voted.
VASCO Data Security
As with many other companies, shares of VASCO Data Security have been cut way back recently, with disappointing earnings in the past two quarters fueling the drop. Despite the shaky confidence that many investors now have in VASCO, some have put the company on their turnaround play list. VASCO already has some leading Indian banks as customers and announced it will open a subsidiary in Mumbai to capitalize on more opportunities in the enterprise sector. CAPS members still see opportunity as well, with 98% of 2,101 members rating it bullish on the company.
Quality Systems
The NextGen Health care subsidiary of Quality Systems recently signed one of its largest agreements ever, with Banner Health, to provide its health-care information software solutions to the non-profit system. It's one of the few growth stocks that can fund and pay a sizeable dividend, so investors like the growth and income combination of Quality Systems. CAPS members do, too -- more than 97% of the 2,066 members rating the company believe it will beat the S&P.
NETGEAR
Small-cap networking product maker NETGEAR is taking advantage of the increasing demand for wireless connectivity products by putting its products on the shelves of more than 3,500 Wal-Mart (NYSE:WMT) stores. With its price down more than 60% from its peak a year ago, Fool Tim Hanson is thinking NETGEAR is an outrageously cheap stock. A large contingent of CAPS members agree, with 97% of those rating the company expecting NETGEAR to outperform the market.
Let 110,000 members be the judge
The collective wisdom of a huge pool of investors can help give context to a page of numbers developed through a stock screen. But even with an entire community of qualified opinions acting as the judge, individual investors are still the jury and should perform their own due diligence.
Want to run your favorite parameters through the Motley Fool CAPS screener? It's totally free, including the extensive investor knowledge base of ratings, commentary, and blogs..
