Dream Stocks for Small-Cap Investors

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 discover the 10 best stocks of the past decade. But I'm more interested in the tools that can help me evaluate tomorrow's greatest companies.

Motley Fool CAPS offers a variety of resources to aid Fools in finding tomorrow's leaders. Our 145,000-member community is full of investors helping one another beat the market.

We'll enlist CAPS to screen for small-cap companies, then get the story behind some of its more highly rated stocks. CAPS' nifty screener will help us find stocks with:

• A market cap between $100 million and $1 billion.
• A three-year revenue growth rate of at least 30%.
• A price-to-earnings ratio of less than 25.

Then we'll tap the collective intelligence of our CAPS members to see whether these companies present real opportunities -- or whether the numbers don't tell the true story.

Opinions with the numbers
Below is a sample of stocks our screen returned.

Data and star rankings from CAPS as of Dec. 24.

ReneSola
With ReneSola's acquisition of JC Solar earlier this year, the company has transformed itself into a vertically integrated player, and its recent acquisition of Dynamic Green Energy will advance the reshaping even further. ReneSola has experienced a big rebound in demand for its solar products lately, and CAPS members like its potential to pick up market share. It reported record shipments in the third quarter, similar to peer JA Solar (NASDAQ:JASO), and it's almost finished working through its high-cost inventories, which means investors are looking for potentially higher margins. Today, nearly 98% of the 994 CAPS members rating ReneSola see it beating the broader market.  

China Natural Gas
While Chevron (NYSE:CVX) and ExxonMobil are looking to capitalize on China's soaring fuel demands, China Natural Gas is making a big bet on the future of natural gas by expanding its footprint in the country. During the third quarter, it increased its pipeline customers and its compressed natural gas stations. It expects to open its new liquefied natural gas (LNG) plant in the second quarter of 2010, which it believes will help it take a bigger share of the LNG market. China Natural Gas grew its third-quarter revenue and now forecasts up to 20% revenue growth for the full year. CAPS members like the growth potential of the company and give it a top rating of five stars, with nearly 98% of the 1,465 members rating it expecting market-beating performance.                

Force Protection
After competitors such as Lockheed Martin, Navistar International (NYSE:NAV), and Oshkosh (NYSE:OSK) beat Force Protection for contracts earlier this year, it made moves to adjust its costs while it looks for new business. The transformation is still underway, with many challenges still likely, but some CAPS members hail Force Protection's finer points -- like the continued strength of its Life Cycle Support business in servicing existing vehicles and its debt-free balance sheet. In CAPS, 93% of the 887 members rating Force Protection expect it to outperform the broader market.

Let 145,000 members be the jury
The collective wisdom of a huge pool of investors can help give context to a page of numbers from a stock screen. But individual investors are still the best judges of what to do with their own money. Fools should always perform their own due diligence.

Happily, it's easy to chime in with your own opinion. If you agree that these companies present dream opportunities -- or if you see more of a nightmare -- simply scroll down and add your thoughts in the comments box.