Mining Investors' Dream Stocks

Investors are always hunting for the next big stock -- the dream stock whose price increases several times over when the market finally discovers it. It's easy to look back and see what the 10 best stocks of the past decade were. But for my part, I'm more interested in the tools that can not only help me find new stock ideas, but also have the resources necessary to evaluate tomorrow's greatest companies.

Motley Fool CAPS is a tool that offers a variety of resources to help with finding tomorrow's leaders. Let’s enlist CAPS to screen for top mining stocks and get the story behind them. CAPS' nifty screener will help us find mining stocks with:

• A market cap of at least $100 million.
• A three year revenue growth rate of at least 20%.
• A price-to-earnings ratio of less than 25.
• A return on equity of at least 20%.

Then we'll tap the collective intelligence of our 110,000-plus CAPS members to see whether these companies present real opportunities -- or whether the numbers fail to tell the true story.

Opinions with the numbers
Here's a sampling from the list of stocks our screen pulled up today:

Data and star rankings from CAPS. All data as of July 18.

Taseko Mines
Canadian miner Taseko isn’t going to let any backlogs in mining equipment slow down its production. It recently announced a $100 million procurement package to pick up some essential equipment needed to speed up expansion of its Gibraltar Mine.  The expansion effort is projected to dramatically increase throughput capacity by the fourth quarter of 2010, resulting in 180 million pounds of copper and 4.5 million pounds molybdenum annually. A strong majority of CAPS members applaud the deft moves, with nearly 98% of the 1,206 members rating Taseko expecting it to outperform the market.

Vale
One look at Brazilian miner Vale's CAPS page and it is evident it has made many investors' list of dream stocks. First quarter financials showed gross revenue up by 4.8% and adjusted EBITDA rose a healthy 17.1%. With strong raw materials demand outstripping supply, the company has been able to command huge price hikes on ore prices for delivery to China’s Baosteel.

Though it was less than the $15 billion hoped for, the $11.5 billion Vale recently raised in a share offering will give the miner lots of flexibility to buy its way into new markets or bolster current capacity. CAPS members remain largely bullish on Vale, with nearly 98% of the 5,194 members rating the company seeing it outperform the S&P going forward.

Rio Tinto
Mining merger fever continues to rage on as Rio Tinto is still resisting a takeover from BHP Billiton (NYSE:BHP). So far, the stake that Alcoa (NYSE:AA) and Aluminum Corp. of China (NYSE:ACH) took in Rio has not been a deterrent for BHP. To add a little more sizzle to the pot, Rio recently bumped up its expected annual production to an increase of 8.6% each year through 2015. With iron ore accounting for about 30% of Rio’s revenue, and an 85% higher price agreement with Baosteel, BHP may have some competition for Rio Tinto. With Rio setting quarterly production records for iron ore, mined copper and alumina, most CAPS members rating the company -- more than 96%, in fact --  expect the company to outperform the market.

Mechel
Integrated Russian miner Mechel recently announced outstanding results for its first quarter, with its mining segment showing a 183% increase in net income. Unlike more pure mining plays, Mechel efficiently uses its self-produced mining products in its other business segments and sells the surplus to outside customers.  Steel producers like POSCO and ArcelorMittal now recognize the benefit of vertical integration and have started mining projects of their own. Even with a stock that has nearly tripled in the past year, more than 97% of the 1,347 CAPS members rating Mechel still believe it will outperform the broader market.

Let 110,000 investors be the judge
The collective wisdom of a huge pool of investors can help give context to a page of numbers developed through a stock screen. But even with an entire community of qualified opinions acting as the judge, individual investors are still the jury and should perform their own due diligence.

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