Chinese and Indian stocks? They're so last year. At least that seems to be the case among more than 65,000 investors participating in Motley Fool CAPS, the Fool's free investor-intelligence community.

These days, many investors are looking to tap the growth potential of South American stocks. In fact, five of the top 40 rated stocks in the CAPS universe hail from Chile and Brazil. 

Spring has sprung
Brazilian and Chilean markets remained hot over their winter months and have risen 53% and 20%, respectively, so far this year. Now that spring has arrived in the Southern Hemisphere, investors are hoping for an even warmer fourth quarter.

Among the hot companies on the continent, Compania de Minas Buenaventura SA (NYSE:BVN), a gold-mining company along the same lines as Barrick Gold (NYSE:ABX) and Newmont Mining (NYSE:NEM), has risen 81% this year, following a modest 1% gain in 2006. Even the largest companies in the region, such as CVRD (NYSE:RIO) and Petrobras (NYSE:PBR), have continued to grow -- they've returned 142% and 53% year to date, respectively.

Steel and iron producer Gerdau (NYSE:GGB) is the highest-rated South American stock in CAPS this month, with 312 of 314 investors who've rated it expecting the stock to beat the market going forward. The most common reasoning among the bulls centers on its price-to-earnings ratio of 13, a healthy dividend yield of 2.2%, and its growing operations in Argentina and Uruguay.

Here are the rest of the top South American stocks right now.

Company

Country

Gerdau

Brazil

Banco Bradesco

Brazil

Brasil Telecom Participacoes (NYSE:BRP)

Brazil

A.F.P. Provida

Chile

Aracruz Celulose

Brazil

Data from Motley Fool CAPS.

Please bear in mind that these are not formal recommendations. I offer them here as jumping-off points for further research.

You had me at Oi
While 123 of 124 CAPS investors who have rated Brasil Telecom believe that the company will outperform the market, very few of them have given a detailed explanation as to why they think this is the case.

Sure, Brasil Telecom is a major player in the growing Brazilian communications industry and the stock is up 80% for the year. And yes, the company has an extensive network of fiber optics connecting the U.S., Bermuda, Venezuela, and Brazil. But the real growth story to watch at Brasil Telecom is its mobile-communications segment, which saw its revenue nearly double last year from $300 million to $583 million.

What do you think about Brasil Telecom? Will the company be able to capitalize on the growing demand for mobile technology in Latin America? Tell us what you think. More than 65,000 investors participating in Motley Fool CAPS are waiting to hear what you have to say.

To make your voice heard on Brasil Telecom, or any stock, for that matter, head on over to CAPS right now!

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Fool contributor Todd Wenning is ranked 758 out of 65,000-plus CAPS players. He does not own shares of any company mentioned. Petroleo Brasileiro is a Motley Fool Income Investor selection. The Fool has a disclosure policy.