Drink In These Top Stocks

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 165,000-strong CAPS community -- where members give the thumbs-up or thumbs-down to some 5,400 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.

Source: Motley Fool CAPS.

Of course, just because a lot of investors find these stocks interesting doesn't mean they're an automatic addition to your portfolio. You still need to do more research to find out whether they're interesting because they're set to take off, or because their stocks are ready for a trip to the cellar.

A tall drink of water
With any luck, BP (NYSE: BP) has gotten the necessary equipment in place to sharply diminish the flow of oil into the Gulf of Mexico. The "top hat" looks like it was successfully attached to the damaged well, which portends a greatly reduced flow, though the leak would not be completely stopped.

If BP has done it, then a more rational look at deepwater drilling can take place. In the aftermath of the disaster, hysteria reigned, perhaps rightly so, but at one point it seemed as though the Obama administration was going to suspend shallow water drilling, too. The U.S. needs to be able to access elusive oil resources such as those found deep in the Gulf if we're to wean ourselves off foreign sources, so a complete ban on deepwater drilling -- let alone in shallow waters -- is not the answer.

All oil companies, including those not even party to the disaster, like Brazilian driller Petrobras, have been dinged by it, though. Petrobras' stock is 15% below where it was before the Transocean (NYSE: RIG) rig collapsed in an explosion, but investors like CAPS member Geofiz see its recent discoveries as shielding it from any additional fallout:

Petrobras is my number one long term stock. They have made huge discoveries in Brazil's subsalt basins. The sole factor which could prevent Petrobras from becoming the world's largest public oil company is that of financing and schedule. If the company can develop these fields in an orderly manner, nothing can stop them.

Something to build on
When your potentially biggest rival abandons the field of play, your own prospects for dominating the pitch grows exponentially. Such is the situation Baidu.com finds itself in after Google (Nasdaq: GOOG) left its operations on mainland China (it still offers service from Hong Kong) because of hacking attacks on its site aimed at Chinese human rights activists. With the government there mandating that search results be filtered, Google decided to move offshore and provide at least limited access to data.

With no real challengers left, Baidu's stock has soared 86% so far this year, even as China's Shanghai Composite index has fallen 22%. At 100 times trailing earnings and almost 40 times 2011 profits, the search engine doesn't exactly appear cheap, but if you compare that to its long-term growth prospects, you see it's not particularly overvalued.

CAPS member gse46 thinks all the stars are in alignment for Baidu, and that we'll wistfully look back at today's prices:

Much of China's lower class is still moving up into the middle class area. As that happens the population is buying more computers/laptops/IPADS etc.....which means BAIDU will continue its rise for the foreseeable future! Just imagine where this company will be 15-20 years from now?

The pause that refreshes
llgrout suggests that investors considering putting money into beverage and food giant PepsiCo pair up its stock chart with that of the market index, and you'll see they typically march lockstep. You could overlay Coca-Cola (NYSE: KO) on top of that, too, and see a similar pattern. A bet here is pretty much a bet on a recovery of the overall U.S. economy:

If you look at pepsico's chart, it is right in line with the market. Why? Simple, when the economy is doing well people have more money and time for non essentials such as junk food, and other luxury products which pepsico sells. They are also feeling better about themselves, so they are more likely to open up the wallet for stuff they truly don't need. A bet on pepsico is a bet that the economy will recover just fine.

As he notes, they have far-flung operations, and if a recovery can take root in a number of places, they (and the indexes) should be marching higher.

Gather 'round
With so many good opinions about today's top companies, why not grab a pointy paper cup from the dispenser and join us at the Motley Fool CAPS water cooler? 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.