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5 "White Smoke" Stocks

By Rick Munarriz – Mar 13, 2013 at 9:42PM

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These five companies have no bearish analysts at the moment.

It's not just Catholics watching a certain Vatican City smokestack.

As cardinals gather to elect a new pope, the conclave uses a smokestack to communicate the deliberations. If a consensus isn't reached on a new pontiff, black smoke trickling out of the smokestack informs the public that the vetting process continues.

However, the moment that a bullish consensus has been reached on the religion's next pope, white smoke is released.

Now let's bring it back home to investing.

It's hard for investors to have universal opinions on every stock. The same largely holds true for analysts. A lot of great companies have their detractors, just as even terrible companies have their believers.

I screened through various popular companies around Fooldom, looking out for investments where analysts are generally bullish. Any stock with an underperform or sell rating was discarded. These are five of the "white smoke" stocks where every major analyst has a hold rating or better on the investment.


Strong Buy





SodaStream (SODA)






Amarin (AMRN)






Capstone Turbine (CPST -1.51%)






Linn Energy (LINEQ)






Micron Technology (MU 0.02%)






Source: Thomson Reuters.

Wall Street approved
Let's start at the top with SodaStream.

The company behind the popular beverage maker that transforms still water in sparkling soda is in a good groove these days. SodaStream's revenue soared 55% during the holiday quarter, and profitability once again outpaced the expectations of these same bullish analysts.

Things should continue to get better for SodaStream. It sold a record 1.1 million starter systems in its latest quarter, and that should translate into healthy growth in the higher-margin carbonators and flavors down the line.

Cynics argue that SodaStream is a passing fad, but analysts apparently don't see it that way. Posting record results is a great way to debunk that myth.

Amarin bulls have high hopes for the company's flagship Vascepa drug. This FDA-approved medication for the treatment of severely high triglyceride levels recently hit the market, and Amarin is just getting started to cash in.

Investors are far more skeptical than Wall Street's pros. Amarin closed out February with 25.6 million shares sold short, a 52-week high in the number of bearish bets placed against the promising drug maker. Bullish investors don't necessarily have to worry about the naysayers. If anything, it's paving the way for a short squeeze at the next whiff of bullish catalysts.

Capstone Turbine make co-generation turbines that run on many different fuel types. There's healthy demand for the product. Capstone closed out its latest quarter with $136.5 million in orders. Profitability has been a problem. Capstone has yet to post a quarterly profit. However, deficits continue to narrow and analysts see the company finally breaking even this year.

Analysts aren't necessarily falling over themselves to recommend Capstone. It's the only stock on this list without a single strong buy recommendation. However, it still makes the cut with five buy ratings and a single analyst at hold.

Linn Energy has been a beacon for income investors given its healthy 7.6% yield. It's also been a beacon for smaller oil and natural gas companies eyeing an exit strategy. Linn Energy completed $2.9 billion in acquisitions last year, and it has already surpassed that sum this young year. Between continuing sector consolidation and fixed income investors taking on more risks in the pursuit of higher yields, Linn Energy is an analyst fave.

Finally, we have Micron Technology. It has the largest representation of the five names on this list, with 27 analysts all rating the memory chips giant at hold or better.

Micron has benefited from the popularity of flash memory in smartphones, tablets, and netbooks. DRAM prices may head lower in the future, but Micron is well positioned here. The bullish analysts have ignored Micron's recent streak of larger-than-expected quarterly deficits, focusing in on what should be a profitable future.

After trading in the single digits for nearly two years, Micron is now a good trading day away from returning to the double digits.

Up in smoke
These five stocks aren't perfect. Amarin, Capstone, and Micron are losing money. Linn Energy may be snapping up companies too quickly. SodaStream faces growing awareness of the health risks of soda consumption.

However, it's important to note that not a single major analyst is down on any of these companies.

The smoke is white, and analysts see a future of green.

Editor's note: A previous version of this article incorrectly referred to Amarin's Vascepa as the first FDA-approved medication for the treatment of high triglyceride levels. The Fool regrets the error.

Longtime Fool contributor Rick Munarriz owns shares of SodaStream. The Motley Fool recommends and owns shares of SodaStream. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Stocks Mentioned

Amarin Stock Quote
$1.19 (%)
Micron Technology Stock Quote
Micron Technology
$53.69 (0.02%) $0.01
SodaStream Stock Quote
Linn Energy, LLC Stock Quote
Linn Energy, LLC
Capstone Turbine Stock Quote
Capstone Turbine
$1.64 (-1.51%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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