3 Stocks Approaching Greatness

For every stock out there screaming, "buy me," others simply give us a nudge and a nod. While all the attention might be focused on their five-star peers, we can sift through Motley Fool CAPS to find four-star stocks giving us the "high sign" they're approaching greatness.

These opportunities -- including familiar names and beaten-down companies -- rank higher than most of the other 5,400 starred companies, and it pays to investigate their potential. For consideration today I have this handful of stocks on their way to fame.

  • Panera Bread (NAS: PNRA)

  • Richmont Mines (ASE: RIC)

  • TIBCO Software (NAS: TIBX)

As the 180,000-plus CAPS members have chosen these companies as less obvious sources for tomorrow's great buys, let's see why they might merit your attention.

What goes up must come down
The high cost of commodities damaged the bottom line of many companies, from denim maker True Religion Jeans (NAS: TRLG) and retailer Aeropostale (NYS: ARO) , which stumbled on soaring cotton costs, to cereal producer General Mills and fast-casual restaurant Panera Bread, which have had to contend with pressure from rising wheat costs. The relief valve has been opened now, and we're seeing the effects starting to wear off.

Cotton prices are down by more than half since March, and after a nearly 50% jump in price last year, wheat is set to have its biggest slump since 2008. Prices are expected to sink to $5.90 per bushel by the end of this year, 56% below the record it hit back then.

Panera still beat analyst expectations for the third quarter even though its costs still outstripped the rise in revenues. Coupled with its planned buybacks, however, the restaurateur is expecting earnings to come in higher than anticipated for the full year.

CAPS All-Star icebox40 says Panera is a great place to eat and a great stock to own, but share your thoughts on the Panera Bread CAPS page if you think the bread maker can rise further, and then put it on your watchlist to keep track of its progress.

Shining bright
Junior gold miner Richmont Mines reported quarterly results that saw higher gold prices realized -- around $1,740 an ounce compared with $1,250 an ounce a year ago -- but saw fewer ounces sold. Richmont still has high cash costs per ounce, and it expects them to remain elevated as the company pursues methods of extracting gold more efficiently. Cash costs rose 16% to $904 an ounce in the quarter as its Beaufor Mine needed additional development, but the mine's recovered grades improved by 30% over the first nine months of the year.

Now Richmont will probably never get anywhere near the consolidated by-product cash cost of just $94 per ounce of gold equivalent that Yamana Gold (NYS: AUY) has on the basis of its incredible copper output at its Chapada operation in Brazil. But Richmont has its eye firmly set on reducing costs going forward.

CAPS member 14570fool realizes the miner will be sensitive to the fluctuations in the price of gold for some time to come but ultimately thinks as it brings new properties online it will benefit overall: "PE should rise as production grows with new mine producing. High cost per oz of gold produced should make stock price very sensitive to gold price."

Tell us in the comments section below or on the Richmont CAPS page whether it can dig up better profitability, and add it to your watchlist to see its progress.

Applying itself
TIBCO Software sells enterprise-level software that allows applications to connect to one another. It beat Wall Street expectations last quarter by posting better-than-expected results with both revenue and earnings hitting double-digit growth, even as its financial-services business contracted by 4%. It doesn't seem to be having trouble building on its outstanding performance last year.

More revenue is coming from emerging markets, though the U.S. still accounts for more than half the total. It will be competing against IBM (NYS: IBM) and Oracle (NAS: ORCL) , which are also in an expansive move, but as they found, out TIBCO has been bold enough to win Wal-Mart and Macy's as clients from the big rivals.

So successful has TIBCO been in its efforts that highly rated CAPS All-Star ll0o0ll wouldn't be surprised to see one of the industry giants buy it: "Demand for middleware products will be strong as you need to connect software run on public and private clouds. Tibco is one of leading companies and is likely to be snapped by Oracle."

Give us your thoughts on the TIBCO Software CAPS page on where it should next chart its course, and then add the stock to the Fool's free portfolio tracker to see if it follows through.

A great opportunity for you
Investor sentiment suggests that these four-star investments still seem to be on their way to five-star greatness, but it pays to start your own research on these stocks on Motley Fool CAPS. 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.

At the time thisarticle was published Fool contributorRich Dupreyowns shares of Aeropostale, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Panera Bread, Oracle, Wal-Mart, and Aeropostale.Motley Fool newsletter serviceshave recommended buying shares of Panera Bread, Wal-Mart, and TIBCO Software, as well as creating a diagonal call position in Wal-Mart. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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