These Stocks Beat Gold Stocks

On some market days, news headlines are dominated by individual stocks whose shares have soared over the past year. Other times, investors are bombarded with statistics of how an entire group of stocks -- from a certain sector or industry -- has outpaced the general market.

Gold stocks are one such group that has caught investors' eyes lately, thanks to spot prices of the glittery commodity that have more than doubled over the past four years.

But I can tell you tales of investments from another sector beating the pants off of gold stocks ... and where you can find out more about them.

Would the real hot stocks please come forward?
By using Motley Fool CAPS, investors can get detailed information and community intelligence on not only individual stocks, but also entire sectors, regions, and industries.

Any of the 5,200 rated stocks that are profiled in CAPS can be "tagged" with a descriptor that groups the company with others that share a certain quality, such as a country of origin, sector, or end-product. A single click on the "gold" tag pulls up 79 stocks that -- as a group -- have risen a market-beating 13% in the past year.

Using the tags in CAPS can lead you to a group of stocks in another sector that has more than doubled the return of stocks in the gold group: education & training services. While I'm certain this group of companies comes up in cocktail party conversations much less frequently than gold, the 33 companies under this tag have risen a more impressive 36% in the past year. Granted, the reasons behind the dramatic growth could be quite different. Thankfully, CAPS can help us dig under the surface.

From macro to micro
Tag groups can be sorted quickly by their CAPS ratings, denoted by one to five stars. Individual companies can then be viewed to show details of who -- from Wall Street to Main Street -- is bullish or bearish on the company and why. For instance, here are a few of the highest-rated stocks in the gold group.

Similarly, here's a sampling of education & training services stocks that -- judging by interest in the CAPS community -- investors may want to consider:

While being "too cool for school" may still be hip in the U.S., Chinese culture dictates otherwise. With limited space in the country's universities, education in the world's most populous nation is revered, not taken for granted. No wonder, then, that New Oriental struggles to keep up with demand for language training and test preparation courses.

In its most recent quarter, New Oriental heaped on the homework, reporting a 50% increase in revenue and an even bigger boost in profits. But while New Oriental's fundamental business is strong, investors do question the stock's valuation. To go along with its fantastic performance, the company trades at a whopping 42 times forward earnings estimates -- too pricey for 43 of the 615 investors rating the company in CAPS, who believe New Oriental will underperform the S&P in the future.

Another potentially worthy option in the education-services sector is educational travel company Ambassadors Group. The firm helps send students, athletes, and professionals abroad to expand learning experiences. In the process, the company has been able to double both revenue and earnings over the past three years, in addition to producing copious amounts of cash. But just last month, the company projected a substantial reduction in student travelers for 2008, which summarily sliced the stock by more than half. Some new CAPS investors see that as a signal to make a contrarian pick and join the 96% of players rating the company with a bullish vote.

Before you buy ...
Of course, investors don't want to be looking in the rearview mirror to find out where they should be investing now. But the underlying reasons behind dramatic run-ups in stocks or groups of stocks can clarify macroeconomic trends that may significantly affect investments. 

No matter where investing ideas come from, investors should always perform their own due diligence, rather than following crowds or individual recommendations.