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, companies that rank higher than most of the other 5,400 starred companies, but fall just short of a top ranking. While all the attention might be focused on their five-star peers, we can sift through CAPS to find four-star firms approaching greatness. Here are a handful of stocks that are approaching greatness.
China Yuchai International
Some of these names might surprise you. For example, biotech ImmunoGen is finding success licensing its platform technology to pharmaceuticals and drugmakers, though Seattle Genetics
Tenet Healthcare has become the object of desire for Community Health Systems, which bid $3.3 billion for the hospital operator. Yet as the 170,000-plus CAPS members have chosen these companies as less obvious sources for tomorrow's great buys, let's see why they might merit your attention.
In the sight of greatness?
Even though the Chinese diesel engine maker gave back about 10% of its recent gains, China Yuchai is still trading at twice the level it was a year ago. Government stimulus spending has stimulated sales, with revenues rising 32% last year showing it can effectively compete against more established names like Cummins, which has been producing light-duty, high-performance diesel engines in China since 2009.
CAPS member plateoftheday says as China builds out the country's infrastructure, China Yuchai will be a beneficiary.
Growth in China and demand for diesel engines for infrastructure build out. Also good management, good balance sheet, and competitive edge
More than 91% of the 388 CAPS members rating the engine maker agree that it will continue to beat the market. Drive on over to the China Yuchai CAPS page to add some torque to your rationale for why it's not yet ready to stall out.
After rising to more than $31 an ounce at the start of 2011, its highest level in 30 years, silver tumbled down to $26 but has steadily worked its way back up and is currently trading above $30 again. Many analysts see this as only a way station on its road to even higher plateaus, more so than gold because of the gray metal's industrial uses.
That bodes well for silver giants Silver Wheaton
Recovering from a sharp correction in the silver market. Price has been consolidating around the 9 dollar level, waiting to take off again with the spot price of silver. Good short to intermediate term play, not sure about growth prospects for the long term.
Add Hecla Mining to the Fool's free portfolio tracker and keep an eye on all the news and analysis that develops.
On the level
Despite reporting quarterly results that missed analyst expectations, Synovus Financial sharply narrowed the gap between the losses it reported this go round and those it posted a year ago. Improving credit trends gives management hope that the worst is behind it, particularly since the third quarter marked the third consecutive one where the losses declined, putting them at their lowest point in two years.
Still, on a full-year basis Synovus lost $848 million, a pretty deep hole it's digging itself out of, though it plans to finally record a profit by the end of 2011 as total nonperforming assets continue to improve. They were down 18% sequentially in the fourth quarter, and 30% lower year over year to $1.3 billion.
Despite its problems, the CAPS community remains largely supportive, with 86% of the more than 400 members rating the financial institution to outperform the broad market averages. If it's still too risky for you, add Synovus to your watchlist, then head over to the Synovus Financial CAPS page to deposit your own thoughts on its future.
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.