Some companies are obviously great investments -- in hindsight. Yet for every stock out there screaming "buy me," others simply give us a nudge and a nod. How can we tell tomorrow's obviously great investments from the thousands of pretenders?
The stars' walk of fame
On Motley Fool CAPS, these opportunities can be found among our four-star stocks. In CAPS' proprietary ratings system, they rank higher than most of the other nearly 5,400 rated companies, but they're just shy of superstardom. While all the attention might go to their five-star peers, we can find four-star companies approaching greatness. Here are a handful:
- Freeport McMoRan (NYSE:FCX)
- InterDigital (NASDAQ:IDCC)
- MEMC Electronics (NYSE:WFR)
- Rubicon Minerals (NYSE:RBY)
- SandRidge Energy (NYSE:SD)
Some of these names might surprise you. Freeport McMoRan, for example, has been a leading copper and gold miner. Almost great? Yet even familiar names can still offer some of the best opportunities. Perhaps we've just forgotten the potential they still hold. However, the 145,000-plus CAPS members chose these companies as less obvious sources for tomorrow's great buys, so let's see why they might merit your attention.
In the sight of greatness?
Another gold bug with big potential is Rubicon Minerals, which has sizeable operations in the Red Lake district in Ontario, Canada. The area hosts Goldcorp's (NYSE:GG) high-grade gold mines, so it's no surprise that Goldcorp's former chairman and CEO owns a sizeable slug of Rubicon's stock. Some speculate that Rubicon would make a perfect takeover target.
While Rubicon is seen as a more risky exploration play, you have to wonder if the Fool's gold (and silver) guru Chris Barker was being particularly prescient when he identified this junior miner a while back as a potential bonanza. In addition to its Canadian holdings -- it has reported good results in its F2 zone at Red Lake -- Rubicon controls some sizeable acreage in both Alaska and Nevada. It's also financially stable and has no debt.
Rubicon is not Goldcorp, at least not yet, and it remains to be seen just how much gold it'll be able to pull out of the ground. Gold prices have been jumpy lately depending on the movement of the dollar, but have hovered around $1,100 an ounce.
Although CAPS members remain bullish -- more than 97% rating the company believe it will outperform the market -- they've been relatively silent about why they're optimistic, so why not head over to the Rubicon Minerals CAPS page and offer your opinion.
On borrowed time
Now that billionaire investor T. Boone Pickens has put wind energy on the backburner, cutting by half the turbine purchases he was going to make from General Electric (NYSE:GE), he'll have more time to focus on natural gas as an alternative fuel source. That bodes well for SandRidge Energy and its peers in natural gas exploration and drilling. And the recent cold weather -- and the National Weather Service's revised forecast for February -- has helped raise prices.
While market factors are moving in the industry's favor, some investors, like CAPS member mccarthyconsultg, are concerned that SandRidge won't be able to take full advantage because of its financial situation.
Yet, in spite of this great value, why is its chart pattern so up and down, with only a marginal indication of an uptrend? Could it be that investors are cautious about the company's long term performance and its ability to manage debt and improve sales. I can't answer this question, therefore I will not buy at this time. I am cautious.
It is true that SandRidge has just $14 million in cash and more than $2.1 billion in long-term debt on its balance sheet, yet 96% of CAPS members rating the company mark it to outperform. Head over to the SandRidge Energy CAPS page and offer your views on this natural gas play.
A great opportunity for you
Investor sentiment suggests these four-star investments still seem to be on their way to five-star greatness, but it pays to start your own research on these stocks on Motley Fool CAPS. 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.
