Some companies are obviously great investments -- in hindsight. Yet for every stock out there screaming "buy me," others simply give us a nudge and a nod. How can we tell tomorrow's obviously great investments from the thousands of pretenders?
The stars' walk of fame
On Motley Fool CAPS, you can find these opportunities among our four-star stocks. In CAPS' proprietary ratings system, they rank higher than most of the other 5,500 stocks in the CAPS universe, but they're just shy of superstardom. Even though their five-star peers get all of the attention, we can sift through CAPS to find four-star companies approaching greatness:
Some of these names might surprise you. Sportswear maker Under Armour, for example, makes sweat-wicking T-shirts that have essentially become de rigeur in major-league sports. Yes, even familiar names can still offer some of the best opportunities. Perhaps we've just forgotten the potential they still hold. However, the 110,000-plus CAPS investors chose these companies as less obvious sources for tomorrow's great buys, so let's see why they might merit your attention.
Shaking its moneymaker
It's still true that the burger-flipper jobs we got in our youth at places like McDonald's
Hmmm. Well, whatever the merits of being an exotic dancer are -- and I can't really believe it's "easy" money, though it might be good -- the stripped-down earnings results from Rick's shows that sin stocks can benefit investors. The company's pre-release for the third quarter shows that sales nearly doubled from the year before, while comps were up 8.4% year over year. It's the habit of the repeat customer that has CAPS member chriscobal giving Rick's the thumbs-up:
I know a lot of guys who spend insane amount of $ going to strip clubs. It defies logic, you're paying to get teased, but it makes $. I know even more women who will exploit themselves to make $ so there should be no shortage of prospective employees.
Digital-integrated-circuit maker Zoran has its chips in a host of digital TV set-top boxes, sales of which are being driven by the mandated conversion to the digital format next year. Yet its new system-on-a-chip for digital cameras has been ramping up as well and should, if at least one analyst's retail checks prove true, help ameliorate the loss of two key converter box designs. However, the same analyst sees the weak economy affecting that, as well.
With an options backdating scandal pretty much behind it, CAPS member countolaf finds that Zoran's ubiquity -- even if you don't realize its products are inside your set -- makes the chip maker an attractive buy.
Zoran's chips are in everything -- the new DTV converter boxes from many companies that will be in great demand as we approach Feb. 2009, and it wouldn't surprise me to see their chips inside future version of devices like the Netflix Roku. ... They ... made a logical acquisition of a French company recently.
Sit back, relax
With only one legacy U.S. airline among its customers, BE Aerospace, a manufacturer of aircraft cabin interiors, is far less constrained by the precarious situation of U.S. airlines than you might believe. Moreover, it possesses contracts with both Boeing
Airlines are cancelling or pushing back [deliveries] of aircraft, but the Boeing 787 Dreamliner is not just a pipedream. In the [meantime,] there is plenty of existing work, including work on the smaller corporate jets, sales of which remain strong. I believe that BEAV stock is oversold and will come back strongly over time.
A great opportunity for you
You've heard directly from the CAPS community on some of these stocks approaching greatness, but do you agree? Are these four-star candidates still investment-grade material? On Motley Fool CAPS, give your input and ultimately influence how they're rated. Outperform or underperform, near-term or well in the future, your opinion counts.
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