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 discover the 10 best stocks of the past decade. 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 165,000-member community is full of investors helping each other beat the market.
We'll enlist CAPS to screen for growing tech 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 15%.
- 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.
|
Company |
Revenue Growth Rate,
|
CAPS Rating
|
|---|---|---|
|
TriQuint Semiconductor (Nasdaq: TQNT) |
15.4% |
***** |
|
China Information Security Technology (Nasdaq: CPBY) |
130.6% |
**** |
|
Suntech Power (NYSE: STP) |
32.0% |
**** |
Data and star rankings from CAPS as of July 16.
TriQuint Semiconductor
With TriQuint's technologies in hot-selling mobile devices like the Droid, iPad, iPhone 4, and Amazon.com's (Nasdaq: AMZN) Kindle, many CAPS members like TriQuint's growth prospects in the mobile sector. The Kindle is locked in heated competition with other e-readers, and Apple's iPad and iPhone 4 have been flying off the shelves. Similar to competitor Skyworks Solutions (Nasdaq: SWKS), which also has technology in the iPhone 4 and reported a 38% jump in fiscal second-quarter revenue, TriQuint's first-quarter top line grew by 52%, and the company expects a strong second quarter as well.
With consumers still spending heavily on the latest wireless devices, investors like the momentum TriQuint's business has going for it; about 98% of the 374 CAPS members rating TriQuint Semiconductor expect it to outperform the market.
China Information Security Technology
Digital security and software company China Information Security Technology reported solid first-quarter results in May, with revenues rising nearly 70% and a backlog reaching a record $46.5 million. As China continues to upgrade its infrastructure technology, China Information has continued to book national contracts like supplying geographic information system (GIS) platform software for a nationwide smart grid buildout. The increase in activity led the company to boost its full-year guidance, and it recently announced that newly signed contracts in the second quarter were 49% higher than the previous year.
CAPS members see big benefits from having the Chinese government on its customer list, and close to 98% of the 538 CAPS members rating China Information Security Technology are bullish.
Suntech Power
Even though Suntech Power's financial results took a hit from currency losses in the first quarter, it still managed to deliver earnings that rose more than 10 times year over year, with revenue increasing 86%. Similar to smaller peer LDK Solar's (NYSE: LDK) bullish full-year forecast, Suntech bumped up its shipments forecast as it's seen strength in multiple markets. A similar tone was recently struck by Solarfun (Nasdaq: SOLF), which said it's mostly sold out of its capacity for the rest of 2010 and plans to increase capacity for next year.
Despite threats of a weak euro and declining solar subsidies, a lot of CAPS members remain bullish on the long-term outlook for Suntech; 96% of the 4,387 members rating Suntech Power believe it will be a market-beating investment.
Let 165,000 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.
Happily, it's easy to chime in with your own opinion. If you agree that these companies present dream opportunities -- or see more of a nightmare instead -- simply scroll down and add your thoughts in the comments box.
