Whether it's the corporate lunchroom, your cubicle, or the local watering hole after work, there are regular places we gather to discuss news, sports or -- if you're like us -- stocks. Here at Motley Fool CAPS, we gather around the virtual watercooler daily to rate stocks and delve into their merits as investments.

Our 115,000-strong CAPS community -- where members give the thumbs-up or thumbs-down to more than 5,400 stocks -- has shown a propensity for making prescient market calls. Our data indicates that newly minted five-star stocks offer some of the best opportunities to investors, while the lowest-rated companies fared worst. Below, we'll take a look at some of the top-rated, most talked-about stocks in the CAPS universe, and whether you think they will outperform or underperform the market.


CAPS Rating (5 Stars Max)

No. of Recs

% Outperform





Bank of America (NYSE:BAC)




Johnson & Johnson (NYSE:JNJ)








Sirius XM Radio (NASDAQ:SIRI)




A tall drink of water
We won't find out the real numbers till next week, but if one analyst's guesstimate proves anywhere near correct, Apple's done an incredibly awesome job of continuing its growth trajectory. Apple may have gained nearly 10% in market share, even when its products are priced considerably higher than the competition's and the economy is turning south. While the analyst points to a potential flattening in the growth rate, that doesn't mute this extraordinary achievement, at least in my book.

I also think Apple was smart to avoid the so-called "netbook" trend. These are small, underpowered notebooks, put out by Hewlett-Packard (NYSE:HPQ), Acer, and others, that are supposedly a cool new way to surf the Internet. I think their tiny screens, weak battery life, and inability to offer the advantages of a full-fledged notebook make them a fad that will probably die out. If you want a cool, small device to surf the web, buy an iPhone -- you'll get a cell phone thrown in for free.

Top-rated All-Star CAPS member DemonDoug thinks Apple's the leader in too many areas to keep hitting 52-week lows:

52 week low... down 17% in one day... Now THIS is some blood on the streets action. (PS - iphone still the best phone in the world and I know too many people nowadays that are using macs. oh yeah, they also have that ipod thingy too)

Yet another All-Star, jgseattle, thinks the retail sector's failing health may soon slow Apple's pace:

[F]alls into my retail short basket. Some might think this is a sttrange pick for that but so much of [Apple] is Ipod, Iphone and the consumer is going to pull back and not make those lux buys.

Gulping down deposits
This isn't your mom's banking system anymore, but Bank of America remains the largest U.S. bank, with $1.9 trillion in assets. It's going to get a whole lot bigger, too, once the FDIC finally signs off on its merger with Merrill Lynch (NYSE:MER). Antitrust regulators have already approved B of A's $35 billion merger with the world's largest investment banking firm.

Bank of America's ability to avoid making the same mistakes as its rivals has allowed it to scoop up some of the country's most important financial assets. As top-rated CAPS All-Star BuffettBoy2 notes, B of A doesn't need a bailout -- it's the one bailing out the failures:

As I said in my blog post: Monkeys Picking Stocks
I like [B of A]. Here's why:

  1. They don't need a bailout. They are bailing others out.
  2. They have been responsible (comparatively to others in the financial sector).
  3. The recession is not phasing them. They will be the winners because they are buying low. They are doing what businesses should strive to at all times: they are building market share and increasing future revenue possibility.

[B of A] is the fittest in this Darwin Market.

Gather 'round
How 'bout you? Will the iPod-maker remain the apple of investors' eyes? Can we take Bank  of America's good fortune to the bank? Grab a pointy paper cup from the dispenser and join us at the Motley Fool CAPS water cooler, where your input can help guide other investors to stocks with bright growth prospects for growth. 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.

Sign up today for the completely free service, and let us hear what you have to say about the great and almost-great companies that interest you.

Johnson & Johnson and Bank of America are Income Investor selections. Netflix and Apple are Stock Advisor recommendations. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.