Tomorrow's Monster Stock?

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 by taking advantage of the market's weaknesses. These aren't penny stocks; they're viable companies with sound business prospects that are achieving phenomenal returns. 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've enlisted the help of more than 145,000 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
Shorting is a risky endeavor, because investor irrationality can last longer than your ability to stay in the game. But it can't go on forever, and a stock will eventually return to the mean. Such is the case with e-commerce leader Amazon.com. It's had a knack of making its detractors look quite silly as it punches through one milestone after another, but the company could be set up for a big fall.

No one is saying that Amazon's not a good stock to own -- it probably deserves a spot in most investors' portfolios -- but when you buy is often just as important as what you buy. CAPS member journeyer77 suggests that as good an e-tailer as Amazon is, its current valuation doesn't support its growth opportunities:

While I love Amzon.com, Amazon is approaching the price of Apple for a share of stock but its services and technology are not expanding nearly as rapidly. I predict it to fall off in 2010 and then climb again after its price has been adjusted by the market.

The deck stacked against it
Although oil prices have settled over the past week, and they remain well below the record highs hit in 2008, they're still at historically elevated levels. That's surprising, since slack demand and high inventories remain potent forces in the market. One offshoot of this analysis is the large numbers of rigs that drillers have cold-stacked, meaning they won't have a crew or be actively marketed.

While that will affect overall utilization rates for drillers like Transocean, which had 26 rigs cold-stacked by the end of last year, it also serves to protect dayrates of the rigs that do remain in service. So despite a recession, this driller is likely to see stronger earnings, as a result of robust oil prices and its aggressive cold-stacking maneuvers. That same policy has turned heads before.

Even as its market multiple has been inching up lately, CAPS member Aneirin finds Transocean still very attractive, given its status as a standout industry leader:

Very cheap at a PE of just under 8, and it has amazing amounts of cash flow and free cash flows for its price. As the largest and best offshore driller, this is a good deal. 

The CAPS community agrees, as 98% of the nearly 5,500 members who have rated it believe it can outperform the market. Why not stack your opinion against the others on the Transocean CAPS page?

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.