Tomorrow's Monster Stock

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

The market's best stocks include companies that have risen dozens of times in value by taking advantage of the market's weaknesses. These aren't penny stocks; they're viable companies with sound business prospects that are achieving phenomenal returns. Finding just one or two of these monstrously successful companies can help you establish a winning portfolio.

Stalking the monster
To find tomorrow's winners, we've enlisted the help of more than 170,000 monster trackers at Motley Fool CAPS. We've compiled a list of the most successful CAPS members, 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.

Score is how many percentage points by which that pick is beating the S&P 500.

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

In search of Bigfoot
The market made a lot of noise about insiders buying up about $1.5 million worth of shares in Exelixis over the past month. It probably figured it was a vote of confidence in the company after the partnership with Bristol-Myers Squibb (NYSE: BMY) for the last-stage cancer drug XL184 ended and the company CEO left soon after.

Investors are showing confidence, too, boosting Exelixis' share price by 15% over the past month. CAPS member morgullord says that unless all of the biotech's drugs become worthless, the company should go on to outperform the broader averages.

Yet the market's reaction seems to be based on little more than hope. True, Bristol-Myers Squibb didn't say XL184 had problems, but neither did GlaxoSmithKline when it backed off from developing it beforehand. While the willingness of pharmaceuticals to partner with Exelixis suggests the drug has potential, their lack of staying the course may mean the return isn't what they had hoped for. And the more times a partner backs out, the harder it becomes to bring someone new on board.

Without any drugs on the market, Exelixis has a lot riding on this treatment's success. That by itself means nothing in determining whether it will be successful, but it does say that the risk-reward profile tilts heavily toward the risk.

Big challenge
President Obama's drilling moratorium was designed in part to counter appearances that he wasn't tough enough on the industry after the Deepwater Horizon rig disaster.

The moratorium won't have a huge impact on BP, Chevron (NYSE: CVX), or ExxonMobil because their far-flung global operations insulate them from the fallout. The smaller operators like Hercules Offshore will bear the brunt of the president's plan. Hercules' rigs are finishing up contracts in the Gulf, and unless drilling is allowed soon, they will end up being idled. Second-quarter results might not have reflected what's going on there, but you can be sure the third quarter's will if things don't change.

CAPS member 37weeks also points out that as difficult as the drilling ban makes the situation, Hercules' financial position isn't too stellar, either. "This driller is under a mountain of debt and drilling permits are hard to [come by] creating a tough climate for drillers at the present time."

A big setup
Sigma Designs seems to be weighed down by analysts' consensus views that growth in sales of flat-panel TVs is going to slow considerably. While the company's chips are used in set-top boxes, the growth in one segment should follow growth in the other. It's also facing stiff competition from Broadcom (Nasdaq: BRCM), Texas Instruments (NYSE: TXN), and more significantly MIPS, the industry-leading chip maker in digital media products.

Yet Sigma Designs holds the potential for meteoric growth, which is being overlooked. That's part of the rationale behind CAPS member traviskang liking this chip specialist.

long-term value, with Hulu, Netflix, and iTV entering the market and becoming popular Internet content providers (entertainment), the IPTV market will take over the traditional cable/sat co's. In a decade, I see only 1 medium of communication and that's through the Internet, if SIGM develops the proper partnerships/attracts the right clients then it's potential growth is enormous!!

A chance for scary growth
It takes more than a few All-Star picks and a quick pitch to make buy or sell decisions, so start your own research on these stocks on Motley Fool CAPS to find other opportunities with monster potential.