Some stocks simply have such great potential that "everyone" knows they're a good buy today. Yeah, we wish.

If we knew beforehand that Daktronics (NASDAQ:DAKT) would return almost 4,100% over the past decade, we'd have mortgaged the house to the hilt. If we had the inside scoop that Hansen Natural was a 29,000% winner in that time period, we'd have mortgaged your house, too!

In fact, if investing were so easy, we'd all be millionaires. It's easy to see after the fact which companies have been winning investments. We need a way to know beforehand which companies will become the next Microsoft or Wal-Mart, growing tens of thousands of percent in value over the years. But there hasn't been a way.

Until now, that is.

More than 60,000 professional and novice investors have rated stocks on Motley Fool CAPS.  We can now consult their opinions about which stocks will beat the market, and which will lose to it. While most ratings feature a tug of war between bulls and bears, we've identified dozens of stocks that members of CAPS have unanimously chosen to outperform the market.

That's no small feat. Thousands upon thousands of companies have been rated, and convincing arguments can be, and are, made on both sides. For example, Motley Fool Hidden Gems recommendation Nuance Communications (NASDAQ:NUAN) is a top-rated stock, with 4,133 CAPS investors chiming in on the company. Yet while almost 4,000 of them think the stock will beat the market, that still means there are more than 160 CAPS investors who don't.

So when you come across a stock that everyone thinks will outperform, you've got something special, and we as investors ought to take notice.

Here are a handful of those "obvious" investments.



CAPS Rating

American Software (NASDAQ:AMSWA)



Metalico (AMEX:MEA)



Dade Behring (NASDAQ:DADE)






As always, none of the companies on this list should be considered a formal recommendation -- just a starting point for further research. We've simply narrowed your workload by focusing on the companies that CAPS investors universally expect will beat the market.

Proud to be American Software
A leading supplier of supply-chain-management software, American Software has suddenly run into some strong headwinds, plunging its stock from highs of more than $13 to its current $8 level. There don't seem to be any fundamental problems; the stock's just had a pretty big run-up over the past year, amid very strong earnings reports. The company also has an 88% ownership stake in Logility (NASDAQ:LGTY) -- itself a four-star CAPS company -- which saw annual licensing sales jump 48% year over year in the fourth quarter.

Still, it may be hard to keep that momentum going. With its first half of the fiscal year typically weaker than the second, and forecasts of a possible slowdown in IT spending in the back half of calendar-year 2007, it looks like American Software is taking a breather.

That hasn't dampened spirits on CAPS, however. For example, WilliamCrook2003 noted last month:

This is a company which is really two companies in one, both highly rated by the motley fool investors community. I have seen this company increase in share price by about 10% in the last month. I expect great things from this business.

That dual-company ownership situation has also attracted the notice of the top-rated research and market analysts at Netscribes:

The operating environment seems to be favorable as it managed to acquire a number of new customers and enter into software license agreements during the current fiscal. Logility, in which the company holds 88%, is the largest global supply chain and forecasting solutions company based on its number of customers. Logility's top line is also expected to grow in double digits and this should also boost the company's performance. Besides their fully owned subsidiary New Generation Computing (NGC) seems to be rightly positioned to provide integrated shop floor system solutions to U.S company's having operations in China.

It also happens to be why dietvanillacoke thinks American Software is so very cheap:

Sneaky play here. AMSWA owns 88% of LGTY, which is about 11.3M shares. Unless my math or understanding are wrong, that means each share of AMSWA "owns" about .45 shares of LGTY. If LGTY is trading at $9.50, that makes each share of AMSWA contain about $4.275 of LGTY plus $2.818 of cash. At $9.00 per share, that means you are getting the whole rest of AMSWA at $9.000-$4.275-$2.818 = $1.907. Doesn't sound like a bad deal to me!

Add in a 3.6% dividend yield, and this company seems both attractive and undervalued.

Let's hear from you
How about you? We'd love to hear what you think about these companies, or any others you consider worthy "obvious" winning investments. If you want to add your two cents, sign up to join the Motley Fool CAPS community. It's fast, easy, and 100% free.

Nuance is a recommendation of Motley Fool Hidden Gems. A 30-day free trial subscription gives you the logic behind all of Tom Gardner and Bill Mann's market-whomping small-cap stock picks.

Fool contributor Rich Duprey owns shares of Wal-Mart, but does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here. Wal-Mart and Microsoft are recommendations of Motley Fool Inside Value. The Motley Fool's disclosure policy is perennially popular.