Dream Stocks for Internet 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 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 one another beat the market.

We'll enlist CAPS to screen for Internet-based 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 gross margin of at least 50%.

Then we'll tap the collective intelligence of our CAPS members to see whether these companies present real opportunities -- or whether the numbers don't 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 Aug. 6.

ClickSoftware Technologies
Only a meager few Wall Street analysts follow ClickSoftware, which makes some CAPS members excited about the opportunity to get in on a high-quality small cap before more investors recognize its growth potential. The company recently reported record second-quarter revenues, with software licensing sales up 54% over last year, adding more cash to a balance sheet that doesn't show any debt. The company, which develops workforce management software, has a solid list of customers such as Hewlett-Packard and Best Buy, giving many CAPS members more confidence that it will continue on its high-growth path. The bullishness in CAPS is nearly universal, with 98% of the 559 CAPS members rating ClickSoftware Technologies expecting it to outperform the market.

Sohu.com
Although Sohu's online gaming spinoff Changyou faces stiff competition from market-share leaders like Tencent and Shanda Games (Nasdaq: GAME) in the Chinese online gaming market, the gaming arm continues to be a strong revenue driver for Sohu. Both Changyou and Sohu posted record second-quarter revenues, with Sohu's other main source of revenue, ad sales, showing some renewed strength in the form of a 26% increase in ad sales. The ad market has picked up for both Sohu and search engine peer Baidu (Nasdaq: BIDU), whose top line got a boost because of the 25% increase in active online marketing customers in the quarter. Never mind the near-term gyrations in the market, many CAPS members see some long-term upside as the company benefits from the growing Chinese Internet. Overall, 95% of the 1,155 CAPS members rating Sohu.com are bullish about its chances to beat the broader market averages.

Akamai
Similar to the sell-off in competitor Level 3 Communications (Nasdaq: LVLT) after its recent earnings release, Akamai's shares shed more than 10% of their value in quick order after the company reported second-quarter results. While Akamai still posted increasing revenue and earnings -- in contrast to Level 3's red ink -- investors instead focused on management's saying there would be higher costs as it invests more money to meet an increased demand for the company's services. One piece of good news was that despite increasing competition from others like Internap Network Services (Nasdaq: INAP), who are pushing more into content delivery, Akamai reported that prices seem to be stabilizing. CAPS members recently took Akamai's rating down a notch, but the stock still sits at a solid four stars. In CAPS, 96% of the 3,028 members rating Akamai pick it to outperform the broader market.  

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.