Tomorrow's Monster Stocks

Stocks that climb to 10 times their original price are rare -- but they're not impossible to find. Especially when you have Fools for friends.

The market's best stocks include companies that have risen hundreds of times in value over the past decade. These aren't penny stocks; they're viable companies with sound business prospects, achieving phenomenal returns every year. Finding just one or two of these monstrously successful companies can help you establish a winning portfolio.

Stalking the monster
To find tomorrow's monster stocks, we'll enlist the more than 83,000 investors at Motley Fool CAPS. We've compiled a list of the most successful CAPS players, dubbed All-Stars, whose picks have doubled, tripled, or even quadrupled in price. Then we've plucked out some of their recent picks for stocks they find equally promising.

Of course, this is not a list of stocks to buy -- or, for those monster stocks that our CAPS All-Stars have already found, to sell. Just consider them starting points for your own further research.

Auctioning off growth
You've heard actors referred to as a "young Marlon Brando." Well, MercadoLibre may very well be described as a "young eBay" (Nasdaq: EBAY) and, in fact, this Argentinean look-alike is actually a partner of the salty online auctioneer.

It also seems to have growth potential similar to that of its mentor back in the day, and having gone public just last August, MercadoLibre may live up to the reputation as the Best International Stock of 2008.

Or it might be difficult, however. The stock currently trades for less than half its 52-week high (although in MercadoLibre's case, we might just call it a 26-week high); that price was reached at the end of December, and the stock has fallen hard since. Even so, it sports a P/E ratio north of 180, putting it in the stratosphere valuation-wise and meaning it would have to grow earnings to about 10 times their current value to put it in line with what the market as a whole is producing. Tall order, indeed.

But companies don't always fall in line with the market's value, and some companies -- eBay, for instance -- have generally had higher-than-average valuations. In fact, today eBay's P/E ratio sits in excess of 100.

Top-rated CAPS All-Star tuffsleddingsees MercadoLibre as a latter-day version of eBay and America Online, reminiscent of how those companies looked in their early years, poised to grow handsomely over time:

The manic-depressive market is giving us a very nice entry point. South America is ready to put its storied past behind and get on with becoming a prosperous rapidly growing region of the world. This is like buying into E-Bay or AOL in the early days.

Skipping the typical analogies to U.S. companies, CAPS investor leowise2008 simply looks at the burgeoning Latin American markets and sees great potential here:

This co has the lead on a nascent [Latin American] ecommerce market. LA customers feel more comfortable when using [MercadoLibre] Vs [eBay] or other "foreign" portal. The co is well managed and is poised to increase its presence in LA's developing HUGE market for e commerce. Most people and business in LA are yet to FULLY realize the benefits of e commerce, [MercadoLibre] will be there when that happens, and the co can grow exponentially.

Not everyone, however, is sold on the comparisons or the ability of an Argentinean company to replicate the success of eBay or anyone else. CAPS All-Star player Itsya36 thinks it would have a better shot if it were an American company in the same position:

Foreign stock work in a predominantly American e-economy, now if this were an American e-enterprise company ... that is a different story.

A chance for scary growth
Now's the opportunity for you to weigh in on MercadoLibre, or any of the other stocks these All-Stars see as achieving monster growth. Agree with their views? Tell us on CAPS. If you don't agree, let us know that too! If you've got an opinion, then this is the place where your voice counts as much as anyone's. Let's hear if you think these are tomorrow's monster stocks that have been uncovered today.