Dream Stocks for Tech Investors

Investors are always hunting for the next big stock -- the dream stock whose price increases several times over when the market finally discovers it. It's easy to look back and discover the 10 best stocks of the past decade. But I'm more interested in the tools that can help me evaluate tomorrow's greatest companies.

Motley Fool CAPS offers a variety of resources to aid Fools in finding tomorrow's leaders. Our 130,000-member community is full of investors helping each other beat the market.

We'll enlist CAPS to screen for technology firms, then get the story behind some of its more highly rated stocks. CAPS' nifty screener will help us find stocks with:

• A market cap of at least $100 million.
• A three-year revenue growth rate of at least 20%.
• A price-to-earnings ratio of less than 25.

Then we'll tap the collective intelligence of our CAPS members to see whether these companies present real opportunities -- or whether the numbers fail to tell the true story.

Opinions with the numbers
Below is a sample of stocks our screen returned. You can run this screen yourself -- remember, though, that your results may differ from ours as the market changes.

Data and star rankings from CAPS as of April 3.

Smith Micro
Smith Micro posted a better-than-expected fourth-quarter profit, helped by higher gross margin, and recorded record revenue growth in 2008. The company recently rounded out its top-tier customer list, which includes U.S. wireless carriers AT&T, Verizon, and Sprint Nextel (NYSE:S), with a deal to provide T-Mobile USA with software for its webConnect Laptop Sticks.

Last year, Smith Micro also picked up mobile WiMAX customers Clearwire and Motorola (NYSE:MOT). It's aiming to expand its presence in the mobile WiMAX space as more 4G networks roll out. Smith Micro also signed Dell (NASDAQ:DELL) as a new customer, opening up new possibilities to provide connection management solutions for PCs, netbooks, and consumer electronics. Today, more than 96% of the 828 CAPS members rating Smith Micro expect it to outperform the market.

Thermo Fisher
Scientific equipment maker Thermo Fisher also posted better-than-expected fourth-quarter earnings, despite a slowdown in hospital spending. A large portion of its revenue comes from recurring sales of consumables and services, which helped compensate for shortfalls elsewhere. Though it expects a tough year ahead, the company still managed to report record revenue of $10.5 billion in 2008, with $1.16 billion in free cash flow. Thermo Fisher's seeking new sources of potential growth in emerging economies such as China.

Thermo Fisher's strong financial position earned it an upgraded credit rating from Standard & Poor's, while many other firms saw their credit quality cut dramatically. The firm finished the year with $1.29 billion in cash and short-term investments, and its strong balance sheet has nearly 97% of the 436 CAPS members who've rated Thermo Fisher feeling bullish.

Adobe
Adobe has held up well so far during the recession; its competitive moat continues to help it crank out free cash flow. It generated $350 million of the green stuff in its most recent quarter, on $786 million in revenue. And while some companies, such as Level 3 Communications (NASDAQ:LVLT), may be postponing software upgrades or IT investments, Adobe is still increasing its service revenue from customers' service contracts.

Adobe's Flash platform dominates in delivering web video to PCs, and its Flash Lite player has big potential in the smartphone market. Many investors believe the company is well-positioned to leverage its legacy products, and they're bullish on how the company will perform during an economic recovery. Today, 96% of the 1,657 CAPS members rating Adobe expect it to beat the S&P.

Let 130,000 members be the judge
The collective wisdom of a huge pool of investors can help give context to a stock screen's page of numbers. But even with an entire community of qualified opinions acting as the judge, individual investors are still the jury. Fools should always perform their own due diligence.

Run your favorite factors through the Motley Fool CAPS screener. It's totally free, and we think you'll like the results.