Drink In These 5 Top Stocks

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 water cooler daily to rate stocks and delve into their merits as investments.

Our 120,000-person-strong CAPS community -- where members give the thumbs-up or thumbs-down to some 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 fare worst. Below we'll take a look at some of the top stocks in the CAPS universe that you're talking about the most and whether you think they will outperform or underperform the market.

A tall drink of water
Even though DryShips increased its long-term charters in the second and third quarters to take advantage of contract rates that were at all-time highs, plummeting prices have been exerting pressure on the dry-bulk shipper. It then filed a prospectus regarding a shelf registration that could significantly dilute current shareholders, and used language that spooked some analysts into thinking DryShips might not be able to meet its debt covenants. Needless to say, a stock whose shares were already in free fall from their nosebleed heights dropped even further.

While global trade is down and credit markets tight, hopes for shipping in general and DryShips in particular seem to rest with China breaking free of the economic fog. The country's massive stimulus package is seen by some as a reason for hope, but spot-rate exposure may still consume too large a portion of operations for DryShips and fellow shippers like Excel Maritime (NYSE:EXM).

CAPS member cmanasco acknowledges the difficult straits DryShips has sailed into, but with higher rates locked in for an average of five years, thinks it still has a solid guaranteed stream of revenue:

[DryShips] is too low for it's value right now, yes it does have some high debt issues but they foresaw the slowdown and booked their ships accordingly virtually assuring their revenue stream would continue through these recessionary times. With a p/e well below 1 right now, this is a no brain trade.

Life after debt
As the credit crisis leapfrogs from housing to mortgages to financials, many are expecting it to next make the jump to credit card issuers. With the economy worsening, credit card processors Visa and MasterCard (NYSE:MA) may take reduced credit transaction volumes on the chin as people opt to pay cash.

Yet Visa might not be as bad off as its rivals. For example, it processed three times as many debit card transactions as MasterCard did last year. A debit transaction is every bit as much a cash transaction as using dollar bills. You can still live within your means and Visa will still prosper. CAPS member KokueiOTD figures that whatever changes consumers make in their spending habits, credit card usage, like rock 'n' roll, is here to stay:

Visa's business model is powerful, it lacks the vulnerabilities of American Express and [Discover Financial Services], and it commands a huge amount of the credit card market share. The current economic downturn has beaten the stock down (to attractive buying levels) and will undoubtedly effect earnings in the short term, but I believe Visa has a lot of potential in the long term. Credit crisis or not, I don't think that credit cards will be going away anytime soon.

Gather 'round
The CAPS community offers so many good opinions about today's top companies. Why not 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 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. It's free.