Stocks of the Week

The idea of supplying customers with recommendations based on prior shopping habits isn't all that new. If you've signed on for service with Blockbuster or Netflix, you know about the movie recommendations they hook you up with (mine right now include Batman and Hairspray -- does that say something about me?). Shoppers on Amazon.com get a similar slew of suggestions based on their previous purchases.

Investing in stocks may not exactly be comparable to renting a movie or buying a book on Amazon, but with thousands of stocks out there, finding new ideas can often be overwhelming. To help grease the ol' mental machinery, The Motley Fool's CAPS service recently started providing players with daily stock recommendations.

It works like this: CAPS members create a portfolio by rating some of their favorite (and least favorite) stocks. The super-secret stock-of-the-day algorithm -- which I've heard is run by a computer hooked up to 50,000 hamsters on wheels and uses calculations so complex they'd make Archimedes cry -- is then run. It churns out highly rated stocks for each player based largely on their prior selections and the current phase of the moon.

To give you a sampling of the kinds of ideas CAPS is doling out, here are the five recommendations the CAPS supercomputer spit out for me last week:

Data from Motley Fool CAPS as of Aug. 24, 2007.

As smart as the CAPS Stock of the Day algorithm may be, it's still just an algorithm, so be sure to look before you leap on any of its suggestions. With that in mind, I thought I'd kick you off with some thoughts on BG Group.

Too good for the U.S. markets?
It was just at the end of 2006 that The Motley Fool launched Global Gains to help investors find the great opportunities that lurk outside the U.S. -- which, surprisingly enough, covers a whole heck of a lot of ground. Most of us know by now that the U.S. isn't the only game in town when it comes to stocks, but what may be surprising is that some major global companies are now saying "nuts" to the U.S. markets.

Case in point: BG Group. Back at the end of July, the U.K.- based company, which was listed on both the NYSE and London Stock Exchange (LSE) markets, announced that it will be filing to de-list from the NYSE. With U.S. holders accounting for less than 3% of the ownership of the $59 billion company, BG decided that it wasn't worth the cost of keeping up with the SEC regulations. Of course that's not to say, as the company pointed out in the press release, that it won't continue to hold itself to very high standards.

In the future, potential investors in BG will have to dig up the stock from the Over-the-Counter (OTC) exchange, where it will continue trading. And why would you want to find it, you ask?

CAPS All-Star BCatGuelph describes the company as a "liquid natural gas play" with "good global diversification" and points out that it has "better performance than larger players such as BP (NYSE:BP)." And that last part is a huge understatement.

Though BG doesn't exhibit the smooth, ramp-like growth that many investors seem to like, it more than doubled its revenue between 2001 and 2006. At the same time it held a relatively steady net profit margin in the mid-20% range. The stock has been even more impressive -- for the five years ending Aug. 24th, it has nearly quadrupled.

The company seems poised to continue to excel. It is a major global player in the liquefied natural gas market and has operations in both highly established markets such as the U.S. and the U.K., as well as high-growth areas such as Brazil and India. Though the price of natural gas does tend to be particularly volatile, it is a relatively clean and efficient fossil fuel that will undoubtedly continue to have a huge market as global growth continues.

Now for the real question: Are you getting your own CAPS Stock of the Day selections yet? If not what are you waiting for? CAPS is free, and getting your Stock of the Day picks is much more fun than having me get California's Governator to track you down and give you a wedgie. And don't think I won't do it ...

More CAPS Foolishness:

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Fool contributor Matt Koppenheffer does not own shares of any of the companies mentioned. Netflix is a Motley Fool Stock Advisor recommendation. Matt tried to give The Fool's disclosure policy a wedgie, but was overpowered by its incredible might. Don't worry, he learned his lesson.