Drink In These 5 Top Stocks

Whether in the corporate lunchroom, your cubicle, or the local watering hole after work, there are regular places we gather to discuss news, sports, or -- if you're like us -- stocks. At Motley Fool CAPS, we gather around the virtual water cooler daily to rate stocks and delve into their merits as investments.

Members of our 135,000-strong CAPS community -- where about 5,300 stocks get the thumbs-up or thumbs-down -- have earned points by seeking out the businesses they think will outperform the market. Below, we'll take a look at some of the stocks CAPS members are talking about the most, and whether they think these companies will continue their winning ways.

A tall drink of water
Even if the folks at Dynamic Materials have some of the coolest jobs around -- they're able to make stuff by blowing it up -- they haven't been able to grow their sales in recent months.

Dynamic Materials is the leader in explosion-welded clad metals, the process of joining two plates together that can't  be bonded -- except by, you guessed it, blowing them up. The resulting fused metals are then sold to the oil and gas industries, shipbuilders, and energy and chemical companies. Sales in the second quarter fell 40% year over year to $37.8 million, and management adjusted its guidance. Full-year revenue is now expected to fall between 28% and 32% compared to 2008; previous forecasts were 17% to 23%.

The company doesn't have many direct competitors, but it does have rivals who use alternative (though somewhat inferior) technologies to steal business. Hot-roll bonding is limited to joining similar types of metals together, such as stainless steel and nickel alloys to steel, while weld overlay cladding is also used for similar metal types but is not the preferred method of joining thinner materials. Dynamic Materials' explosion welding can join any two metals together regardless of the thickness, but it is a more expensive process. The company lost a Middle Eastern oil and gas project to a roll-bond manufacturer recently because its rival was cheaper.

Dynamic rounds out its business with oilfield perforating and seismic products, where it competes with Schlumberger (NYSE:SLB) and Halliburton, and an advanced welding service for the power turbine and aircraft engine manufacturing industries, where it counts on United Technologies (NYSE:UTX) and a handful of others for most of its business.

Some investors still believe Dynamic Materials can resume its growth. Of the more than 1,400 CAPS members who have rated the company, 98% say it will outperform the market. Wakester0 says to wait for the economy to stabilize.

Solid company with a nice moat. Good time to buy on the recent pullback. I believe this stock is poised to do very well when industry begins it's inevitable resurgence.

Semiconductor designer Atheros Communications has a similar following on CAPS; a market of more than 1 billion mobile consumer products presents a rich target for its ambitions. The company was able to beat its own revenue estimates and gain market share with its strong products. For the next quarter, it expects revenues to jump 15% to 20% compared with the last quarter, though it may be giving up margins in WLAN and Ethernet to do so.

CAPS All-Star gunark isn't so sure its technology can save Atheros.

P/E way out of [whack]. They're in a saturated market with no new earth shattering technology in the pipeline. Only potential upside is continuing exponential growth in smartphones, but this almost certainly already baked in.

Gather 'round
With so many good opinions about today's top companies, why not grab a pointy paper cup from the dispenser and join us at the Motley Fool CAPS water cooler? There, your input can help guide other investors to stocks with bright prospects. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page.

Sign up today for the completely free service, and let us hear what you have to say about the great and almost-great companies that interest you.