Investors are always hunting for the next big stock -- the dream stock whose price increases several times over when the market finally discovers it. It's easy to look back and see what the 10 best stocks of the past decade were. But for my part, I'm more interested in the tools that can not only help me find new stock ideas, but also have the resources necessary to evaluate tomorrow's greatest companies.

Thankfully, there's one tool that offers a variety of resources to help with finding tomorrow's leaders: Motley Fool CAPS.

We've enlisted CAPS to screen for top biotech stocks and get the story behind them. CAPS' nifty screener can search the drug sector and help us find stocks with:

  • A market cap of at least $100 million.
  • A three year revenue growth rate of at least 20%.
  • A price-to-earnings ratio of less than 25.

Then we'll tap the collective intelligence of our 110,000-plus CAPS investors to see whether these companies present real opportunities -- or whether the numbers fail to tell the true story.

Opinions with the numbers
Here's a sampling from the list of stocks our screen pulled up today.


Revenue Growth Rate, Past 3 Years

CAPS Rating (out of 5)

ViroPharma (NASDAQ:VPHM)






Sinovac Biotech (AMEX:SVA)



Teva Pharmaceutical (NASDAQ:TEVA)



American Oriental Bioengineering (NYSE:AOB)



Data and star rankings from CAPS. All data as of July 8.

Though ViroPharma and partner Wyeth (NYSE:WYE) recently announced that their Hepatitis C drug had failed clinical testing, the company is cash flow-positive, with a profitable drug already on the market. And with nearly $600 million sitting in the bank, ViroPharma has recently increased expenditures to spur sales of its drug Vancocin. With low expectations priced into the stock, many CAPS investors like the small and profitable biotech, even though it remains a risky play.  Of the 1,093 investors rating the company, nearly 98% are bullish that its shares will outperform the market.

Another cash-generating biotech, 3SBio, has been selling its knockoff version of Amgen's (NASDAQ:AMGN) anemia drug Epogen in China, called Epiao. With the success 3SBio has had from Epiao, it has been able to fund the development of several cancer drugs and even buy back shares. With some investors concerned about the risk of focusing exclusively on the Chinese market, the stock is also trading with low expectations. Risks aside, nearly 97% of the 360 CAPS investors rating 3SBio are bullish on the future.

Sinovac Biotech
Chinese vaccine provider Sinovac saw a monster 123% revenue increase in the first quarter, thanks to sales of its hepatitis vaccine Healive and its exclusively supplied avian flu vaccine to China’s national stockpile program. In May, the company donated 50,000 doses of Healive to China’s earthquake disaster area, and it's since received orders for more than 257,000 more doses from the Center for Disease Control. Though small, 216 of the 225 CAPS investors rating Sinovac have taken the plunge and voted for the stock to beat the S&P going forward.

Teva Pharmaceutical
Generic drug giant Teva Pharmaceutical has shown that you don't have to be original to be profitable. The company delivered more than $1.8 billion in operating cash flow last year, thanks to dozens of generic drugs on the market and a strong showing from its multiple sclerosis drug Copaxone. Teva is now in the sights of other generic drugsellers, though, as Mylan intends to market an equivalent to Copaxone. Teva's diverse list of generic and branded drugs has many fans, though, since 975 of the 1015 investors rating the company see it outperforming the market in the future.

American Oriental Bioengineering
High insider ownership, 30% trailing-12-month EPS growth, and a 19% return on equity are a few of the metrics that Fool Rex Moore thinks make a potential winning combination for American Oriental Bioengineering. Though shares have lost a quarter of their value in the past month, nearly 97% of the 1,589 investors rating the Chinese pharmaceutical firm still expect it to outperform the market.

Let 110,000 investors be the judge
The collective wisdom of a huge pool of investors can help give context to a page of numbers developed through a stock screen. But even with an entire community of qualified opinions acting as the judge, individual investors are still the jury and should perform their own due diligence.

You can run your own favorite parameters through the CAPS screener for free. Then give your own opinion -- either good or bad -- on any company you wish in Motley Fool CAPS.