Tomorrow's Monster Stock
Stocks climbing to 10 times their original price are rare breeds. But they're not impossible to find -- especially when you have Fools for friends.
The market's best stocks include companies that have risen dozens of times in value by taking advantage of the market's weaknesses. These aren't penny stocks; they're viable companies with sound business prospects that are achieving phenomenal returns. Finding just one or two of these monstrously successful firms can help you establish a winning portfolio.
Stalking the monster
To find tomorrow's winners, we've enlisted the help of more than 180,000 monster trackers at Motley Fool CAPS. We've compiled a list of the most successful CAPS members, dubbed All-Stars, whose picks have doubled, tripled, or even quadrupled in price. Then we've plucked out some of their recent picks for stocks they find equally promising.
Recent Stock Pick
|cheev||96.09||Universal Display||414.91||Imperial Sugar (NAS: IPSU)||*****|
|EgisCodr||94.51||Saga Communications||447.42||Medallion Financial (NAS: TAXI)||*****|
|timd118||96.74||Complete Production Service||780.77||Paramount Gold & Silver (NYS: PZG)||***|
Score is by how many percentage points that pick is beating the S&P 500.
Of course, this is not a list of stocks to buy -- or, for those monster stocks that our CAPS All-Stars have already found, sell. Just consider them starting points for your own further research of extreme buying opportunities.
A sweet opportunity
A judge's order last year threatened the U.S. sugar supply because he ruled that the Agriculture Department needed to conduct an environmental-impact statement before Monsanto (NYS: MON) could continue producing its genetically modified sugar-beet seed. Sugar beets account for more than half of the U.S.'s sugar supply, with the balance coming from sugar cane. Monsanto's GM seeds make up 95% of the sugar beets that are planted, meaning the industry was going to be devastated by the ruling and consumers would experience sticker shock at the store.
Agriculture overruled the judge (can they do that?) and allowed the seeds to be planted anyway, but that hasn't stopped prices from rising. Imperial Sugar reports price increases of more than 21% from the year-ago period, but its costs for sugar cane rose 34%, while in the aftermath of Ag's go-ahead order, there was a 6% jump in sugar beet acreage planted this year, adding to the pricing pressures and limiting how much it could raise its prices. Add in a flood of Mexican sugar, and it added up to a loss of $1.35 per share last quarter when analysts had been expecting a profit of $0.46 a share.
Highly rated CAPS All-Star member JakilaTheHunsees it like this on Imperial: "It could easily have another 20% or even 50% to fall if things don't get turned around soon, but I think at some level, it becomes so cheap that it's a buy. I'm just not sure that we're there yet."
Satisfy your sweet tooth on the Imperial Sugar CAPS page and let us know whether you think this company will give you a sugar high.
In search of Bigfoot
New York City Mayor Michael Bloomberg will have just as much success busting the wallets of commuters as in breaking city gridlock after raising tolls on bridges and tunnels by 50%. If you're interested in seeing the crime and grime that go hand in hand with Gotham City, it will now cost you $12 for the privilege.
That's going to make a taxi medallion even more valuable, since people who can't avoid going in will probably keep their cars at home, taking mass transit in or opting for a ferry ride across the river. They'll probably need to hail a cab afterwards, so we'll probably see those fares go up soon, too -- all of which will keep Medallion Financial growing.
Medallion finances the purchase of a taxi medallion, which can set you back anywhere from $686,000 to $975,000. Interestingly, Medallion was able to score bailout financing under TARP, which it paid back this summer. Regardless, CAPS member rmackle1 sees a white-knuckle ride for Medallion from here: "I am heavily involved in the ground transportation industry in NYC. I believe that firms involved in the finance of taxicab medallions and vehicles are about to break out from the grips of the recession and move substantially higher in the coming years."
You can follow along by adding Medallion Financial to your watchlist and see whether it can hail a profitable ride.
Delivering solid growth
There's gold in them hills, and Paramount Gold & Silver continues to prove it has an uncanny knack for finding it. While Coeur D'Alene Mines (NYS: CDE) still objects to the work Paramount's done on its San Miguel project in Mexico, which runs adjacent to its own Palmarejo deposit, the miner added to its fortunes a mother lode of gold and silver in Nevada at its recently acquired Sleeper mine.
With gold currently trading north of $1,790 an ounce and silver just under $40 an ounce, Paramount's new resource estimate for Sleeper showed prodigious amounts of both metals, with 2.6 million ounces of measured and indicated gold and another 25.3 million ounces of silver. Add in another inferred 1.1 million ounces of gold and 8.2 million ounces of silver, and you have a lucrative project on your hands.
Highly rated CAPS All-Star member TSIF likes this exploration miner but is wary of buying into a resource estimate that many times ends up getting scaled way back. Investors in Rubicon Minerals (NYS: RBY) , for example, most recently suffered shock when the gold miner revised downward estimates for its Red Lake district mine. Says TSIF: "I'm just getting too familiar with the pops on the resource estimate announcements and then the decays, that I'd rather red thumb the pop and force myself into a vested interest in the stock price for the next few weeks before further assessment."
But you can tell us on the Paramount Gold & Silver CAPS page whether you think investors will be in for a similar rude awakening as the one that confronted Rubicon.
A chance for scary growth
It takes more than a few All-Star picks and a quick pitch to make buy or sell decisions, so start your own research on these stocks on Motley Fool CAPS and marvel at the range of opinions there.
At the time this article was published Fool contributor Rich Duprey holds no position in any company mentioned. Check out his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of Universal Display and creating a synthetic long position in Monsanto. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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