Tomorrow's Monster Stocks?

Stocks that climb 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 that have sound business prospects and achieve phenomenal returns every year. Finding just one or two of these monstrously successful companies can help you establish a winning portfolio.

Stalking the monster
To find tomorrow's winners, we'll enlist the 130,000-plus 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 on extreme buying opportunities.

In search of Bigfoot
Is it a flight of fancy to think that an airline can be a good investment? Obviously, CAPS All-Star Tankota does, particularly since this member has done more than just double-dip on US Airways (seven separate picks!), and earned some monster points with it. Let's see whether this stock would be a first-class ticket to profits or whether it's overbooked.

Giving US Airways some forward thrust is CEO Doug Parker's belief that even if revenue fell 15% in 2009, it could still be a profitable airline. So long as there isn't a total economic collapse on the horizon, US Airways should remain fine.

Like other airlines, US Airways was plagued last year by soaring fuel costs. To conserve cash, carriers cut capacity and initiated nickel-and-dime charges for bags, drinks on flights, and even pillows. While the fees initially outraged passengers, the airline is earning $160 million annually from them. But the carrier also thinks it can do without them and is getting rid of some of the more noxious ones. Fuel costs have declined, and US Airways has cut capacity by up to 10% from last year, further strengthening the bottom line.

With air traffic having fallen less in March than in the first two months of the quarter, industry watchers think a bottom may have been reached. Easter, which fell in April this year but in March last year, might have made those results look even better, had it come earlier.

Yet US Airways is still facing turbulence. Although air traffic is declining at a lower rate (maybe), it's still trending down, as the recession continues to wear away at business travel. And when you look at metrics such as returns on assets, investment, and equity, US Airways is performing terribly over the past year. Although it has more than $1 billion in cash, some $4 billion in debt is also perched on its books.

For those reasons, the market has priced it accordingly, lopping about 60% off its stock over the past year. Only recent market enthusiasm has made it seem not as bad: At one point last month, shares were down some 80% in the last year, and they're still down 95% from the peak they reached in 2006. That low valuation has another CAPS All-Star, NightBengal, believing US Airways is taxiing for a comeback.

Grabbing this while it's still pickable. As shaky as some parts of the company are (fee structure, customer service), with the consolidation and capacity cuts in the industry, I do not think they are going bankrupt within the next couple years, which would be the only thing to push the stock significantly lower at this point. With any kind of competent management (laugh if you want), they can knock down some debt and keep things on track.

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 that 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.