Based on the aggregated intelligence of 165,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, interconnection services specialist Neutral Tandem (Nasdaq: TNDM) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Neutral Tandem's business and see what CAPS investors are saying about the stock right now.

Neutral Tandem facts

Headquarters (Founded)

Chicago (2001)

Market Cap

$395.5 million


Wireless communications

Trailing-12-Month Revenue

$179 million


CEO Rian Wren

CFO Robert Junkroski

Return on Equity (Average, Past 3 Years)


Compound Annual Revenue and Net Income Growth (Over Past 3 Years)

38.9% and 116.5%


$192.5 million / $0



Verizon Communications (NYSE: VZ)

Peerless Network

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 98% of the 1,127 members who have rated Neutral Tandem believe the stock will outperform the S&P 500 going forward. These bulls include All-Star silentrumble, who is ranked in the top 6% of our community, and BlacknGold.

Just last month , silentrumble helped our community connect with the company:

Tremendous network effects give the business much positive momentum. Neutral, good quality data connections at a cheaper price? What is not to like? ... Tremendous value considering the cash on hand and the cheap valuation.

With its stock down about half in 2010, Neutral Tandem remains one of our community's favorite turnaround opportunities. The most recent beat-down came after posting yet another earnings miss, as increasing competition -- from both incumbent local exchange carriers (mainly AT&T, Verizon and Qwest) and similar tandem service specialists (mainly Hypercube and Peerless Network) -- continued to place heavy pressure on the company's sales and margins. Of course, at a paltry PEG ratio of 0.64, CAPS members like BlacknGold believe those concerns are more than priced into Neutral Tandem's shares:

Does an earnings miss really constitute a 17% loss? Don't think so. [Neutral Tandem] is THE leader in its industry. Sure, it faces ever growing competition, but name a company that doesn't. The startup costs facing their competitors are enormous, and [Neutral Tandem] has most of its infastructure in place. Look at the numbers. Free cash flow. Revenue. All of the above. This is a great investment. It may not see the growth that got it over $30 a share, but it will continue to thrive.

What do you think about Neutral Tandem, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool owns shares of Neutral Tandem. The Fool's disclosure policy always gets a perfect score.