For every stock out there screaming, "buy me," others simply give us a nudge and a nod. While all the attention might be focused on their five-star peers, we can sift through Motley Fool CAPS to find four-star stocks giving us the "high sign" that they're approaching greatness.
These opportunities -- including familiar names and beaten-down companies -- rank higher than most of the other 5,400 starred companies, and it pays to investigate their potential. For consideration today I have pair of stocks on their way to fame and glory.
1-Year Revenue Growth
1-Year EPS Growth
1-Year Stock Return
Source: Motley Fool CAPS.
As the 180,000-member CAPS community has chosen these two companies as less obvious sources for tomorrow's great buys, let's see why they might merit your attention.
In the sight of greatness
A dividend that yields just 1.3% doesn't seem all that exciting for a real estate investment trust. ARMOUR yields nearly 18%, while Annaly Capital pays out 14%, so American Tower's trifling amount will likely not have yield-seeking investors stampeding to its door. Their mistake.
American Tower just converted to REIT status starting Jan. 1, so as all REITs must do, it will pay out 90% of its earnings in dividends. But it would appear the real growth phase is still in front of it, as the growth of wireless communications will put its network of towers and antenna systems in high demand. Revenues and earnings have been scaling up in recent quarters, and its shares trade at all-time highs.
There is risk, however, because as the need for towers grows, so, too, does resistance to their siting. It's one of the reasons I think Alcatel-Lucent
Yet there will also remain a need for the towers erected by American Tower and SBC Communications, so I can see a number of winners emerging from the mobile-communications explosion to come as a result of 4G-LTE technology.
While I've put my money on Alcatel, the analyst community is unanimously behind American Tower's ascendancy, and even the broader CAPS community, where more than 900 members have weighed in, finds 90% of those rating the tower company to outperform the market indexes.
More than a threadbare opportunity
Using its contracts with Dell, IBM, and HP, Brocade Communications has encroached on territory traditionally dominated by Cisco
The idea is gaining a lot of attention. Juniper Networks
While CAPS member Lordrobot doesn't see the prospects for a proposal improving anytime soon, that's fine with most other CAPS members, as 94% of those rating the tech specialist see it beating the Street all on its own.
Add the Brocade to the Fool's free portfolio tracker, and let us know on the Brocade Communications CAPS page or in the comments below whether you think it will weave a pattern of growth that would prove attractive to a suitor.
A great opportunity for you
Investor sentiment suggests that these four-star investments are on their way to five-star greatness, but check out some other companies benefiting from the smartphone and tablet revolution. You can read The Motley Fool's report on three hidden winners of the iPhone, iPad, and Android revolution to find out more. This report will be available only for a limited period. Get it before it's gone!
Fool contributor Rich Duprey owns shares of Alcatel-Lucent and Cisco Systems, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Annaly Capital Management, Cisco Systems, and IBM. Motley Fool newsletter services have recommended buying shares of American Tower and Annaly Capital Management and writing covered calls on Dell. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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