Some stocks simply have such great potential that "everyone" knows they are a good buy today. Yeah, we wish.
If we knew beforehand that Frontier Oil (NYSE:FTO) was going to return almost 2,600% 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 the winning investments. What we need is 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 65,000 professional and novice investors have rated stocks on Motley Fool CAPS, and we can check in on their opinions about which stocks will beat the market and which will lose to it. While it's often a tug-of-war between the bulls and the 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, and are, made on both sides. For example, Motley Fool Hidden Gems recommendation First Marblehead (NYSE:FMD) is a top-rated stock where more than 2,000 CAPS investors have rated the company. Yet while over 1,900 of them think the stock will beat the market, that still means there are plenty of CAPS investors who don't.
So when you come across a stock that everyone thinks is going to outperform, you've got something special, and we as investors ought to take notice.
Here are a handful of those "obvious" investments.
|
Company |
Bulls |
CAPS Rating |
|---|---|---|
|
Ball (NYSE:BLL) |
111 |
***** |
|
Lincoln National (NYSE:LNC) |
73 |
***** |
|
Rocky Mountain Chocolate Factory (NASDAQ:RMCF) |
32 |
***** |
As always, none of the companies on this list should be considered formal recommendations, but rather starting points for further research. What we've done is narrowed your workload by focusing on those companies CAPS investors are universally expecting to beat the market.
Having a ball with Ball
If you know Ball at all, it's because they were so closely associated with glass canning jars. While its roots were planted there over 125 years ago, they've long since been uprooted and put on the compost heap. The canning containers are now a part of Jarden (NYSE:JAH). The Ball of today is a high-tech metal and plastic container manufacturer as well as a manufacturer of aerospace technologies. That's a long ways away from helping your grandmother preserve her tomatoes.
It's this focus on seemingly futuristic applications of its technology that has CAPS investors excited about its future. For example, All-Star amassafortune sees numerous opportunities to expand.
Ball Corp has outperformed the S&P for the past five years. Based on recent double-digit year-over-year quarterly growth, I expect the trend to continue. Ball has business units in solid growth areas such as food safety containers and electronics that have military and aviation applications. These segments should continue to grow. Geographically, Ball has operations in high-growth areas like Asia and South America. This, along with the past record of earnings, indicates management has a history of forecasting worldwide trends and a corporate culture that allows for proactive movement toward future opportunities.
Similarly, CAPS investor fiacaid says that, despite a rough two-year period, capable management will foster growth in its various sectors.
Ball Corporation is composed of two divisions: beverage containers and aerospace. Both have suffered in the past two years as the company goes through industry down cycles, growing pains as the company expands, rising raw material costs, and other such typical factors. Management has capably navigated these troubles and is likely headed for excellent gains over the next few years.
Add in a modest 0.7% dividend yield, and this company looks like an attractive investment, something you can preserve in your portfolio for years to come.
Let's hear from you
How about you? What's your take on these or other "obvious" winning investments? If you want to add your two cents, sign up to join the Motley Fool CAPS community, which is 100% free.
