Tomorrow's Monster Stocks?

Stocks climbing to 10 times their original price are rare breeds -- 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 companies with sound business prospects, achieving phenomenal returns every year. Finding just one or two of these monstrously successful firms can help you establish a winning portfolio.

Stalking the monster
To find tomorrow's winners, we'll enlist the more than 130,000 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.

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

In search of Bigfoot
The terms of shipping charters had long been viewed as near sacrosanct. But recently, several companies reported having to renegotiate their counterparty contracts -- or finding the parties going bankrupt, swamping the shipping company like a rogue wave. That risk seems small for Diana Shipping, which includes some high-quality clients as BHP Billiton (NYSE:BHP) and Cargill on its roster.

Yet even with Diana's top clientele and exceptionally low debt exposure -- it ended 2008 with just $238 million worth of long-term debt on its balance sheet (DryShips, in comparison, has about $3 billion and found it necessary to get covenant waivers for $1 billion worth from lenders) -- it's not completely smooth sailing for the shipper.

Within the next year, Diana will have at least half a dozen vessels come due for expiration. Those vessels are currently operating at above-market rates, and they will likely not renew at anywhere near that level, which will impact earnings. Even so, the Baltic Dry Index, the yardstick used to measure shipping costs for commodities, has enjoyed a run-up in recent days, taking it well off the historic lows it was hitting. Diana might not get the top dollar it was used to, but it might not be a beggarly figure either. For example, it just entered into a 13-month, $14,000-a-day contract with a Korean auto parts and steel products company for one of its Panamax carriers; that deal should generate around $4.6 million in revenues.

CAPS member lonewulf47638 thinks the new contract is a positive and finds the potential for China's resurgence as a reason to see Diana Shipping as a cheap stock right now:

Low pe and a good contract for 13 months with foreign copany. 93.3 of the people still working and will buy gas and most need it transported. China will resume purchases this spring and will consume an unbelievable increase to match India with new car sales.

A chance for scary growth
It takes more than a few All-Star picks and a quick paragraph to make buy or sell decisions, so start your own research on these stocks on Motley Fool CAPS. 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. And while you're there, weigh in with your own thoughts on whether you think these are tomorrow's monster stocks.