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 discover the 10 best stocks of the past decade. But I'm more interested in the tools that can help me evaluate tomorrow's greatest companies.

Motley Fool CAPS offers a variety of resources to aid Fools in finding tomorrow's leaders. Our 130,000-member community is full of investors helping each other beat the market.

We'll enlist CAPS to screen for biotech firms, then get the story behind some of its more highly rated stocks. CAPS' nifty screener will help us find 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 less than 25.

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

Opinions with the numbers
Below is a sample of stocks our screen returned. You can run this screen yourself; remember, though, that your results may differ from ours as the market changes.


Revenue Growth Rate, Past 3 Years

CAPS Rating (out of 5)

Dr. Reddy's Laboratories (NYSE:RDY)



Gilead Sciences (NASDAQ:GILD)






Data and star rankings from CAPS as of March 27.

Dr. Reddy's
Indian drugmaker Dr. Reddy's does the majority of its generics business in the U.S., India, the Russia/CIS region, and Germany, enjoying strong growth over the past two decades. Revenue from its global generics business rose 71% in its most recent quarter, helped by the launch of the generic version of GlaxoSmithKline's (NYSE:GSK) Imitrex. The drug has been a big hit in the U.S., where revenue has almost quadrupled, since it's the only generic Imitrex imitator on the market domestically.

A recent FDA run-in for fellow Indian generics outfit Ranbaxy could lead to increased scrutiny for companies like these. Still, many CAPS members express confidence in Dr. Reddy's track record. Cheaply priced shares and a solid outlook for generic-drug demand around the globe give nearly 95% of the 358 CAPS members rating Dr. Reddy's reason to believe the Indian firm will outperform the market.

Gilead Sciences
Gilead sells or shares in the profits of 11 products, but the majority of its sales come from its targeted AIDS drugs, which have helped it grow revenue rapidly over the past several years. Its dominance in AIDS drugs has left Gilead eager to diversify into other areas such as cystic fibrosis and heart disease. In the latter area, its acquisition of CV Therapeutics makes Gilead part of the drug industry's frenzy of megadeals, including Merck's (NYSE:MRK) purchase of Schering-Plough (NYSE:SGP) and Pfizer's buyout of Wyeth (NYSE:WYE).

The convenience of once-a-day pills is a big factor behind Gilead's success in the AIDS market. The company hopes to replicate that model to capture a piece of other disease areas, including the highly competitive hepatitis market. While there are many rival treatments, far more U.S. patients have hepatitis than HIV, with only a fraction of infections currently treated. with that kind of potential for revenue, 96% of the 1,576 CAPS members rating Gilead Sciences have faith that the firm will outperform the market.

As it has in the past, 3SBio dished out rising expenses in its fourth-quarter results, putting a drag on earnings. On the bright side, though, the Chinese firm pulled in 31.5% more revenue in the fourth quarter, and 35% more in 2008 year over year, due to strong growth in its TPIAO and EPIAO products.

Many investors consider the company's high spending levels a wise investment, and they're bullish on its relatively cheap valuation compared to its growth prospects. S3Bio also could reap substantial benefits from China's desire to bolster health-care spending. As such, 96% of the 432 CAPS members rating 3SBio expect it to beat the S&P in the future.

Let 130,000 members be the jury
The collective wisdom of a huge pool of investors can help give context to a page of numbers from a stock screen -- but individual investors are still the judge. Fools should always perform their own due diligence.

Run your favorite factors through the Motley Fool CAPS screener. It's totally free, and we think you'll like the results.

S3Bio is only one of dozens of stocks selected by the Motley Fool Rule Breakers service to beat the market over the long haul. See all the stocks David Gardner and his analyst team have recommended with a free 30-day trial.

Fool contributor Dave Mock dreams of stocks and sugarplum fairies, but not together. He owns shares of Pfizer. GlaxoSmithKline is an Income Investor recommendation. Pfizer is an Inside Value selection. 3SBio is a Rule Breakers pick. The Fool owns shares of Pfizer. The Fool's disclosure policy screens the good, the bad and the ugly.