Peter Lynch is famous not just for his enviable track record as 13-year head of Fidelity Magellan, but also for his quirky investment strategies. The market's best stocks, according to Lynch, are small, growing companies flying below Wall Street's radar.
It makes sense, after all, to pick out the strongest companies that have the greatest chance of being overlooked, and hence, mispriced. As investors, we should all take advice from the man who not only minted fundholders a 28-bagger but actually coined the investing term "-bagger."
With that in mind, we used the CAPS screening tool to find stocks Peter Lynch might love. Below are 10 companies with no more than five CAPS-rated Wall Street analysts calling the stock.
They also have:
- Three-year trailing earnings-per-share growth above 25%.
- Price-to-earnings multiples below 30.
- Market capitalizations below $10 billion.
- At least 300 CAPS picks.
- Four- or five-star ratings from our CAPS community.
Company |
CAPS Rating
|
Industry |
Market Cap |
---|---|---|---|
GigaMedia |
***** |
Internet software/services |
$196 million |
ClickSoftware Technologies |
**** |
Internet software/services |
$171 million |
Cal-Maine Foods |
***** |
Farm products |
$682 million |
NorthStar Realty |
**** |
REIT - Retail |
$251 million |
China Natural Gas |
***** |
Gas utilities |
$231 million |
Universal Insurance |
**** |
Property/casualty insurance |
$214 million |
KV Pharmaceutical |
***** |
Pharmaceuticals |
$131 million |
AZZ |
***** |
Industrial electric equip. |
$435 million |
American Dairy |
**** |
Dairy products |
$484 million |
Cellcom Israel |
***** |
Wireless communications |
$3.1 billion |
Of course, screens are merely a first step in the stock-selection process. Come and join us on Motley Fool CAPS to let the collective wisdom of our 145,000-strong CAPS community help you make your investment decisions. There's information and opinions on more than 5,300 stocks, and don't forget the screening tool to help you sort information. It's all free.