Guideposts to Higher Returns

Stock analysts are about as likely to be right with their forecasts as economists, meteorologists, and fortune tellers. Actually, while the weatherman might not be right any more often, at least he has a scientific basis for his predictions. Everyone else is about as accurate as monkeys throwing darts or flipping coins.

Today, though, companies are "more explicit" in their guidance, hoping to minimize share-price volatility. So let's use the information that companies provide to our advantage. With the help of the Motley Fool CAPS investor-intelligence database, we can tap the collective thinking of more than 110,000 professional and novice investors on which stocks they think are best. We'll look at those companies that have guided higher and pair that information with stocks that CAPS believes have the best chance to outperform the market.

Here are five companies that have recently guided higher, coupled with what CAPS investors think:

Source: Briefing.com; Motley Fool CAPS.

These are companies showing signs of growing their business, and they're followed by both analysts and the CAPS community. But this isn't a list of stocks to buy; instead, it's a list of suggestions for further research.

The good earth
The agricultural sector as represented by Monsanto and Bunge looks to exceed expectations and warrant the high regard in which investors hold the companies, though it is possible the commodities bubble is peaking.

While seed maker Monsanto looks to be the more lackluster of the two, its updated guidance is on an ongoing basis. On a reported basis, Monsanto is expecting earnings to be $3.63 a share. Third-quarter earnings showed revenue rising 26% as a result of seed sales and its Roundup weed killer. That's also letting it pick up market share from rivals Syngenta (NYSE:SYT) and DuPont (NYSE:DD). Despite the less-than-robust guidance, investors like CAPS player DLai0001 remain enthusiastic about the agricultural play:

I'm bullish on the crop industry. If global trends continue, the next big thing will be [agriculture] and the crop trade. With global warming on the rise and drought affecting many regions of the world, it becomes more and more crucial for more water rich nations to increase their crop [yield] to trade with nations who are suffering.

Bunge, on the other hand, expects a bumper crop for the year, even without its recent move to acquire sweetener and starches processor Corn Products. The deal looks sweet as both corn and Bunge's main business, soybean processing, are used in baking, processed foods, and even livestock feed. The soybean business was much better than expected, which led to Bunge's significant upgrade in its guidance.

Although the merger announcement initially caused Bunge's stock to wilt, that hasn't deterred CAPS investors like TLStockPicks: 

I can't help but think that the 10% drop due to the [Corn Products] buyout/ share dilution is a bit of an overreaction at this point. Granted, new shares issued to [Corn Products] shareholders would compose 20% of the enlarged [Bunge], but I think a 10% drop today is discounting the value of [Corn Products] a little too much (my back of the envelope math tells me that the discount being put on [Corn Products] may be in the range of 40%). And I definitely think that it can't drop any MORE solely due to the merger going through.

Guide on!
We want your opinion on these and other companies. Your input can help guide other investors to stocks with bright prospects for growth. Head to Motley Fool CAPS and let your voice lead the way.