It’s no secret that the market has been tough lately. Everyone from professionals to amateurs has felt the pain. When will it end? No one knows, and opinions differ. But there’s one thing all investors can agree on: It's more important than ever to find solid companies that will protect your portfolio against the forces of evil.

To separate the champs from the chumps, I ran a screen on CAPS, The Motley Fool's investor-intelligence database, looking for some of the best companies the market has to offer. 

The criteria I used for the search were simple:

  • I only wanted to consider stocks that are classified by our CAPS community as the best of the best. These businesses needed to have 1,000 active picks and five-star rankings, the highest possible.
  • Next, I wanted to make sure that the balance sheet was solid. One of the best ways to do that is to look for businesses with debt-to-equity ratios of less than 1.
  • Making sure insiders are aligned with shareholders is also a critical consideration. Management should definitely have financial ties to the performance of their company. To show that, I required insider ownership higher than 5%.
  • Finally, a return on equity (ROE) of more than 20% is a must if you want to uncover potential market-beaters. Warren Buffett believes that return on capital (ROE is a proxy when there is little debt) is key when he evaluates a company.

Here's what that CAPS screen came up with. It appears to be a nice eclectic mix.


Debt-to-Equity Ratio

Insider Ownership

Return on Equity

Ceradyne (NASDAQ:CRDN)









optionsXpress (NASDAQ:OXPS)




Sun Hydraulics (NASDAQ:SNHY)








Source: Motley Fool CAPS.

CAPS member johnnykillz had this to say about Marvel just a few days ago:

Marvel has demonstrated their ability to unlock value from their IPR and adroitness at marketing and tying together their myriad storylines. They somehow managed to make Hulk AND Iron Man loveable, approachable, human, and most unlikely of all - contemporary. Not so easy for a big green giant and a hunk of flying iron. Bottom line: They know what they are doing. Heck, they even make money on their research & development arm (some call it publishing).

Regarding Ceradyne, fordfairmont wrote the following in mid-May:

armor is obviously primary, but there's good side business exposure in solar, nuclear, materials refining, and semiconductors. [Aluminum] and [copper] require high heat ceramics for processing. semiconductor output worldwide is at record levels... Solar is hot and [C]eradyne makes single use casting crucibles for the solar wafers. whoever makes solar chips needs wafers and [Ceradyne] benefits whoever the supplier is.

Are these financial dynamos ready to defend your portfolio, or will they open it up to be plundered? Our CAPS community -- made up of some of the brightest minds around -- would like to know what you think. Sign up and give us your take on whether these stocks can defend your portfolio. It's 100% free.

More CAPS content and general Foolishness:

Wade Michels makes sure he’s not the bad guy by disclosing the stocks that he owns. He doesn't own shares of any of the ones mentioned here. Marvel, Options Express, and Vasco Data Security are all Stock Advisor recommendations. Sun Hydraulics is a Motley Fool Hidden Gems pick. The Fool’s disclosure policy is a champion for justice.