Dream Stocks for Mining Investors

Investors are always hunting for the next big stock -- the dream stock whose price increases several times over when the market finally discovers it. It's easy to look back and see what the 10 best stocks of the past decade were. But I'm more interested in the tools that can help me evaluate tomorrow's greatest companies.

Motley Fool CAPS offers a variety of resources to aid Fools in finding tomorrow's leaders. Our 150,000-member community is full of investors helping each other beat the market.

We'll enlist CAPS to screen for mining companies, then get the story behind some of its more highly rated stocks. CAPS' nifty screener will help us find stocks with:

• A market cap of at least $100 million
• A three year revenue growth rate of at least 30%
• A price-to-earnings ratio of less than 25

Then we'll tap the collective intelligence of our CAPS members to see whether these companies present real opportunities -- or whether the numbers fail to tell the true story.

Opinions with the numbers
Below is a sample of stocks our screen returned.

Data and star rankings from CAPS as of Feb. 19.

Rio Tinto
More investors are getting dreamy eyed for Rio Tinto as the miner has made significant progress in reducing debt after its purchase of Alcan. The improved balance sheet and the potential for a 40% rise in annual contract iron ore prices has some believing that credit rating agencies like Moody's and S&P well be boosting the company's rating in the near future -- something the company would obviously like to see happen.

Investors see good potential in the company's stock since Rio Tinto and others like Vale (NYSE:VALE) could see increasing demand from China and other countries this year. Despite some recent tensions due to an indictment of four Rio Tinto employees, demand from China has been strong, and the company sees long-term benefit from strengthening its ties with the country. In CAPS, 96% of the 1,384 members rating Rio Tinto expect it to outperform the market.

Freeport-McMoRan
As copper prices have made a recovery from beaten down recessionary levels, shares of producers like Freeport, Newmont Mining (NYSE:NEM), and Taseko Mines (NYSE:TGB) have made a recovery as well. Increasing copper prices and higher Chinese demand helped Freeport bring in nearly $1 billion in fourth-quarter net income compared to a massive $14 billion loss in the prior year, while revenue more than doubled to $4.6 billion. On the growth front, it's recently been getting closer to a deal with the Democratic Republic of Congo over its jointly owned, massive Tenke Fungurume mine, despite geopolitical difficulties. The company remains cautious about the state of a global recovery and plans to reopen operations accordingly, but many CAPS members are looking farther out at the long-term potential for the company, with 96% of the 5,458 members rating Freeport-McMoRan bullish on its chances of beating the broader market.

Yamana Gold
Many CAPS members like Yamana's ability to take gold out of the ground at an ultra low cost and, with a rising gold price that's helped others miners like Barrick Gold (NYSE:ABX) generate solid earnings, see good days ahead for the miner. It's expecting to boost its production this year and next, and it looks for a big ramp up in 2012 as four of its development stage projects begin production. Yamana expects to fully fund its budget with its available credit, $600 million of available cash, and strong future cash flow -- something investors love to see as the company continues to grow organically. Comparing bulls to bears in CAPS, 96% of the 3,674 members rating Yamana Gold are on the bull side. 

Let 150,000 members be the jury
The collective wisdom of a huge pool of investors can help give context to a page of numbers from a stock screen. But individual investors are still the best judges of what to do with their own money. Fools should always perform their own due diligence.

Fortunately, it's easy to chime in with your own opinion. If you agree that these companies present dream opportunities -- or if you see more of a nightmare instead -- simply scroll down and add your thoughts in the comments box.