Tomorrow's Monster Stocks?

Stocks that climb to 10 times their original price are a rare breed -- but they're not impossible to find. Especially when you have Fools for friends.

The market's best stocks include companies that have risen dozens of times in value over the past decade. These aren't penny stocks; they're viable businesses with sound prospects, achieving phenomenal returns every year. Finding just one or two of these monstrously successful stocks can help you establish a winning portfolio.

Stalking the monster
To find tomorrow's winners, we'll enlist the more than 115,000 monster trackers at Motley Fool CAPS. We've compiled a list of the most successful CAPS members, dubbed All-Stars, whose picks have doubled, tripled, or even quadrupled in price. Then we've plucked out some of their recent picks for stocks they find equally promising.

Source: Motley Fool CAPS as of Sept. 19, 2008.

Of course, this is not a list of stocks to buy -- or, for those monster stocks that our CAPS All-Stars have already found, to sell. Just consider them starting points for your own further research of extreme buying opportunities.

In search of Bigfoot
Though some investors might wonder whether falling oil prices will curb alternative energy's growing popularity, that doesn't seem to be the case yet. Witness the recent earnings report of FuelCell Energy, a developer of fuel-cell power plants for ultra-clean power generation. Profits took a hit as costs rose -- in part because of a manufacturing defect that has since been remedied – but both revenue and order backlog more than doubled this year. Moreover, POSCO (NYSE:PKX), one of the world's largest steelmakers, just opened the world's largest fuel-cell manufacturing facility, in a joint venture with FuelCell.

CAPS member MENGIV  says the strong demand for FuelCell's technology makes the recent drop in price following the earnings report an excellent buying opportunity. In a reply to CAPS member vegas0825, MENGIV wrote at the end of last month that it's time to take advantage of the market's volatility:

Demonstrating the panic fever mentality of the current volatile market, on the news [FuelCell Energy] came up short by .12 cents on estimates, the stock went into free fall this am, off $1.26 a share. --- Those who stopped to actually read the quarterly report further are taking advantage of a buying opportunity. [FuelCell] reported 106 % increase in revenues for third quarter or $27.9 million compared to $13.5 million the same period a year ago. Product sales tripled $23.2 million from $7.8 million.

If you decide to invest, though, be careful. The company is still losing money.

It's a mistake for investors to focus solely on a stock's price when determining whether or not to buy. If you look only at Petrobras' declining share price, you might suspect there's a problem afoot at the company itself, rather than an overall decline in the price of oil. You'd also miss out on the huge opportunities discovered in the massive Tupi oil field, along with Petrobras's recent finds in the Iara field, where both Transocean and Diamond Offshore (NYSE:DO) work. CAPS member Cicciano wrote recently that with Petrobras sitting on some of the world's richest oil reserves, a share price below $40 a stub was crazy:

Petrobras below $40 again? Are you kidding me? ... This company is sitting on some of the richest oil reserves in the world, of which the fabled Tupi oilfield is included. Its all deepwater and a bit hard to reach, but [Petrobras] has demonstrated the technology to get to this oil. Its has conservatively priced the forward price of oil at $35/barrel, so anything above that is gravy to the bottom line--and do you really think we will ever see $35/barrel again?

There are fears that [Petrobras] could get nationalized, but in reality it already is--the Brazilian government is a majority stakeholder in the company, so there is no compelling interest for it to seize the rest and transform [Petrobras] from an innovative company to an inefficient government bureaucracy.

A chance for scary growth
It pays to start your research on these stocks on Motley Fool CAPS. While you're there, weigh in with your own thoughts on whether you think these are tomorrow's monster stocks. You can read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page. There's more to find than you think.