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 140,000-member community is full of investors helping each other beat the market.
We'll enlist CAPS to screen for value plays, then get the story behind some of its more highly rated stocks. CAPS' nifty screener will help us find stocks with:
- A market cap of at least $1 billion.
- A long term debt-to-equity ratio of less than .5.
- A current ratio of at least 1.
- A price-to-earnings ratio of less than 15.
Then we'll tap the collective intelligence of our CAPS members to see whether these companies present real opportunities -- or whether the numbers fail to tell the true story.
Opinions with the numbers
Below is a sample of stocks our screen returned. You can run this screen yourself -- remember, though, that your results may differ from ours as the market changes.
Company |
P/E Ratio |
LT Debt-to-Equity Ratio |
CAPS Rating (out of 5) |
---|---|---|---|
Petrobras |
9.8 |
.35 |
***** |
Fluor |
13.2 |
.01 |
***** |
Raytheon |
10.9 |
.24 |
**** |
Data and star rankings from CAPS as of Aug. 28.
Petrobras
Like other oil companies such as Marathon Oil
Fluor
Despite the challenging economic climate, U.S. engineering company Fluor beat analysts' earnings expectations in the second quarter and, like peer Foster Wheeler
Raytheon
Life is good when your biggest customer is the U.S. government, and Raytheon expects that its defense products will remain a significant part of Uncle Sam's arsenal, particularly its contributions to antimissile systems. And like Northrop Grumman
But for investors concerned about contractors too tightly wedded to Uncle Sam, analyst Broadpoint AmTech noted that Raytheon is also working to expand its international sales mix, and says the company's on pace to meet its target percentage of international customers this year. Raytheon reported that 29% of revenue in the second quarter came from outside the U.S. The company has recently pulled in multiple contracts from international governments, a trend that management expects to increase in coming years. In CAPS, 95% of 1,123 members rating Raytheon expect it to beat the market.
Let 140,000 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. Fools should always perform their own due diligence.
And it's easy to chime in with your own opinion: If you agree that these companies present dream opportunities -- or disagree, and see more of a nightmare -- simply add your comment to the article in the box below. No one's two cents are ever turned away!