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 140,000-strong CAPS community -- where members give the thumbs-up or thumbs-down to some 5,300 stocks -- seeks businesses it thinks will outperform the market. Below we'll take a look at some of the most popular and talked-about stocks in the CAPS universe, and examine whether you think they'll continue their winning ways.
|
Stock |
CAPS Rating
|
No. of Calls |
Outperform Calls |
|---|---|---|---|
|
Frontier Oil (NYSE:FTO) |
***** |
1,265 |
96% |
|
Metalico (NYSE:MEA) |
***** |
1,235 |
98% |
|
Occidental Petroleum (NYSE:OXY) |
**** |
1,255 |
96% |
|
Precision Castparts (NYSE:PCP) |
***** |
1,282 |
97% |
|
Taiwan Semiconductor Manufacturing (NYSE:TSM) |
***** |
1,280 |
97% |
A tall drink of water
Look for powerhouse chip maker Taiwan Semiconductor Manufacturing to become even more of a force in the industry. It just took a large stake in rival Semiconductor Manufacturing International that not only settles a contentious patent dispute, but gives it a more solid position in the Chinese market ahead of a free trade deal with Taiwan expected to be signed next year.
Semiconductor Manufacturing lost a $1 billion patent infringement case in California last week (though analysts question its enforceability in Asia), but the settlement has it instead paying Taiwan Semiconductor $200 million and giving it a 7% stake in the company with the right to acquire up to 10% total.
While TSMC is the world's largest contract chip maker, gaining a firmer Chinese foothold ensures that rivals won't be sneaking through the back door, while giving it greater access to a burgeoning market with lower costs. Taiwan only allows three chip making companies to have operations in China and SMIC has some of the biggest and most expensive fab facilities there. TSMC now has that locked up. Even if its revenues don't come anywhere near integrated chip maker Intel (NASDAQ:INTC), the deal ensures TSMC maintains its preeminent position. SMIC is China's largest contract chip maker.
CAPS member Cryptblade anticipated Taiwan Semiconductor's recent earnings report giving it a boost, and figured because of its Asian pedigree it would rebound more quickly than others:
TSM is set to report this last week in Oct 2009. Set to post earnings and have been pretty consistent. Trading at $10 a share is cheap. Should be trading north of $10.50 for sure. TSM is also supplying to other electronics products such as mobile phones. The potential for growth is strong. Asian stock and Asia and Europe will make recovery faster than US.
Not taking wing
Recently, Foolish aerospace guru Rich Smith rightly argued that Boeing (NYSE:BA) ought to walk away from proposed purchase orders, because the buyers are haggling over price for the 737s like they were trinkets for sale in some Moroccan bazaar.
Yet what's good for Boeing and its profit margins isn't necessarily good for parts suppliers like Precision Castparts or Spirit Aerospace. A 50-plane order from Russia, or one for 200 planes from Ryanair, represents business they'll be able to bank on now, rather than on some hoped-for point in the future. Considering the constant stumbling by Boeing with the Dreamliner, getting and keeping customers must remain a top priority.
Sooner or later, the Dreamliner will take flight, at which time CAPS member sioux04 sees Precision Castparts gaining altitude, too: "Once Dreamliner production starts this stock will be a dream to own."
In the meantime, betting on a recovery in the airline industry seems like a safer bet. Modernizing their fleets means buying more planes, even if the discount comes at the expense of Boeing. The plane maker put itself in that weakened negotiating position, and it hurts not only itself but suppliers, too. The sooner Boeing extricates itself from this mess, the better off Precision Castparts will be.
Gather 'round
With so many good opinions about today's top companies, why not grab a pointy paper cup and join us at the Motley Fool CAPS watercooler? 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.
Sign up today for the completely free service, and let us hear what you have to say about the great and almost-great companies that interest you.
