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Top-Rated Stocks Making Investors Rich

By Morgan Housel - Updated Apr 5, 2017 at 7:56PM

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Big expectations, even bigger returns.

How many times have you heard a sensational stock recommendation, only to be left in the dust? No one has perfect foresight, but let's be honest: The market is full of people who, as Oscar Wilde would say, know "the price of everything and the value of nothing."

To hunt down a few top-recommended stocks that have been rewarding investors accordingly, I summoned our Motley Fool CAPS community to point out a few four- or five-star stocks that have gone gangbusters in recent weeks. Data we've compiled shows that CAPS' top-rated stocks easily outperform the market.

While these are not necessarily formal buy recommendations, I did come across these four-week bloomers, among others:

Company

4-Week Return

Recent Share Price

2009 EPS Estimates

CAPS Rating
(5 stars max.)

Coeur d'Alene Mines (NYSE:CDE)

88%

$0.98

0.05

****

Diana Shipping (NYSE:DSX)

85%

$13.45

1.78

****

GigaMedia (NASDAQ:GIGM)

71%

$5.78

0.81

*****

Manitowoc (NYSE:MTW)

91%

$8.84

2.89

*****

Silver Wheaton (NYSE:SLW)

119%

$5.40

0.24

*****

Suntech Power (NYSE:STP)

78%

$10.26

0.94

****

Yingli Green Energy (NYSE:YGE)

102%

$5.58

7.19

*****

Data from Motley Fool CAPS and Yahoo! Finance, as of Dec. 18.

Click here to rerun the screen I used to find these stocks.

Wither, dollar?
Silver Wheaton's had an impressive run lately as investors rush to get their hands on anything tangible. And can you blame them? Ben Bernanke's going for broke printing as many dollars as possible. Sure, we are in a deflationary environment, but the thought is that once things start to perk up, the trillions of dollars thrown at the financial crisis will spark a serious bout of inflation, making commodity-centric stocks like Silver Wheaton a safe haven.

CAPS All-star TheHuney tends to agree and thinks this five-star stock still has room to run, writing:

With the way the Feds are throwing money around these days, it's difficult to envision a scenario where gold and silver do not see an increase in value. I'm not sure how profound this shift will be, but I'm betting on gold and silver miners for right now. Glancing over [Silver Wheaton's] financials, I don't really get much of a sense of how much this company should be worth, but I expect it to be around the $7-10 range.

The weak-dollar, world-coming-to-an-end theory might sound bulletproof, but can I think of a scenario that'll make it backfire? Oh, yes, I can. It goes like this: The trillions of dollars printed don't cause actual inflation as long as the economy is deleveraging. Before the economy starts to reheat, Bernanke & Co. remember the mistake Alan Greenspan made by keeping interest rates too low for too long and start to ratchet rates back up, reining in the money supply before things get out of control.

Will it play out just like that, with no problems at all? Probably not. But I don't tend to think the commodity play will be as meteoric as some do.

Will the sun shine again on solar stocks?
It's been a dismal year for Suntech Power for two reasons: (1) It was disgustingly overvalued to begin with, and (2) alternative-energy companies aren't nearly as attractive now that oil is as cheap as it's been in years.

Still, some investors think the sell-off has gotten out of control. As CAPS member mccormickcj wrote at the end of last month:

Largest solar company in the most populous country in the world. Spread internationally, including good representation in the US. Solar has taken a huge hit lately, but as oil goes back up, and solar tech becomes more efficient, STP will rebound very strong.

I have to agree. I think alternative-energy companies like Suntech are in a similar situation as most commodity companies right now: struggling as the world deleverages, but set up for a spectacular bull run as things revert to normal and the world is caught yet again without enough energy.

Energy is a peculiar sector: It isn't a fad, it isn't going away, and it'll almost certainly have tremendous influence in the next several decades. The question is what will replace the current generation from fossil fuels. Will it be solar? That's a tough debate, but our CAPS community certainly isn't giving up on this one.

Of course, we'd love to get your take on these stocks as well. Care to share your two cents? Click here to come on over to CAPS and tell us what you think.

For further Foolishness:

On Jan. 12, 2009, Fool co-founder David Gardner, Jeff Fischer, and their Motley Fool Pro team will accept new subscribers to their real-money portfolio service. Motley Fool Pro is investing $1 million of the Fool's own money in long and short positions in a range of securities, including common stocks, put and call options, and exchange-traded funds (ETFs). They also incorporate proprietary CAPS "community intelligence" data into their research. To learn more about Motley Fool Pro and to receive a private invitation to join, simply enter your email address in the box below.

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. GigaMedia is a Motley Fool Global Gains selection. Suntech Power Holdings and GigaMedia are Motley Fool Rule Breakers recommendations. The Motley Fool is investors writing for investors.

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Stocks Mentioned

Wheaton Precious Metals Corp. Stock Quote
Wheaton Precious Metals Corp.
WPM
$34.67 (1.58%) $0.54
Coeur Mining, Inc. Stock Quote
Coeur Mining, Inc.
CDE
$3.23 (1.57%) $0.05
The Manitowoc Company, Inc. Stock Quote
The Manitowoc Company, Inc.
MTW
$11.16 (2.01%) $0.22
GigaMedia Limited Stock Quote
GigaMedia Limited
GIGM
$1.55 (-2.52%) $0.04
Diana Shipping Inc. Stock Quote
Diana Shipping Inc.
DSX
$5.91 (0.00%) $0.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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