Here's a quick quiz: What do eBay (NASDAQ:EBAY), Starbucks (NASDAQ:SBUX), and (NASDAQ:AMZN) have in common? Besides being killer stocks, they all prospered by pursuing green fields -- markets that were either nonexistent or largely untapped prior to their arrival.

Instead of squaring off against competitors in a crowded market, these companies decided to blaze a trail all their own. Starbucks pioneered the premium coffee business, contrary to the established institution of low-end coffee. Amazon and eBay abandoned brick and mortar, leveraging the Internet to gain insurmountable leads in the online marketplace for retail items and used goods, respectively.

Investors looking in green pastures have similarly prospered: Just putting $10,000 behind eBay at its public debut in 1998 would have you sitting on $210,000 today. Spotting Starbucks' open market in the beginning would have you enjoying a 40-bagger with that latte.

Sniffing grass
Looking for green field stocks is a different game -- analysis is tilted much more to trends in developing industries as opposed to competitive analysis in a mature market. The secret to success here is twofold:

  1. Properly identifying a viable, emerging market
  2. Backing the leader in the space

With relatively few companies defining their own markets, part two can be easy, since the list of players is often small. For instance, the digital radio market has only two options -- XM Satellite Radio (NASDAQ:XMSR) and Sirius Satellite Radio (NASDAQ:SIRI) -- from which to chose a leader. The greater difficulty in this case is in determining whether the subscription radio market will prove fertile enough to provide exceptional returns.

Finding lucrative green fields can be easier than you think. David Gardner and his team of Rule Breakers analysts have earmarked several developing niches with tremendous potential. Nanotechnology is one such market where a few radical companies are pushing boundaries with microscopic devices. David has highlighted two promising stocks here, and subscribers have learned how to spot other profitable green fields.

Navigating an open field
My favorite green field, which I jumped into a few years back, is the global positioning system (GPS) marketplace. Once only a military tool, precise-position technology has blossomed to find its way into a litany of commercial applications, from car navigation to outdoor recreation to flight instrumentation.

The company I've pegged as the leader in GPS devices is Garmin (NASDAQ:GRMN), a stock that has already tripled from its December 2000 initial public offering. A company working in another niche of the GPS market whose stock has shot up more than 200% in the past year is SiRFTechnology (NASDAQ:SIRF), a GPS chip maker. Yet even after nearly two decades, companies supplying the GPS market have only scratched the surface. I see this market as not only immature, but also capable of supporting many more companies that exploit profitable niches involving GPS.

Fielder's choice
So if the terms GPS, nanotubes, and antisense technology aren't part of your regular vocabulary, there's a good chance your portfolio is missing some green fields. Understanding wild new technologies is not a prerequisite for investing in green fields, but limiting your vision to mainstream, established markets could make you overlook the next great 40-bagger. Taking a free 30-day test-drive of the Motley Fool Rule Breakers service will help you see what you may be missing.

XM Satellite Radio is a Motley Fool Rule Breakers recommendation. Garmin,, and eBay are Motley Fool Stock Advisor recommendations.

Fool contributor Dave Mock has gone green and owns shares of Starbucks and Garmin. A longtime Fool, he is also author of The Qualcomm Equation . The Fool has a disclosure policy.