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
|fransgeraedts||99.96||Human Genome Sciences||576.83||Infinera (NAS: INFN)||*****|
|BravoBevo||99.98||Skilled Healthcare Group||458.01||JA Solar (NAS: JASO)||***|
Source: Motley Fool CAPS. Score is 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.
Hiding in plain sight
A pivotal company critical to getting data out across the network, Infinera is the leading North American optical networking specialist that is gaining adherents among cable companies, telecom carriers, and Internet content providers. Although capital spending cutbacks by Verizon and AT&T have weighed on earnings results from equipment providers Acme Packet (NAS: APKT) and Juniper Networks (NAS: JNPR) , Infinera's "photonic integration technology" removes components from optical equipment and gives telecom operators a way to scale their network in a more cost-effective manner, making the company more valuable to its clients. Verizon has said it wants to simplify and reduce the cost of its complex network structure, and Infinera's technology allows for lower investment and operating costs, giving it a competitive advantage over its rivals.
With earnings scheduled for next week, analysts see the networking equipment maker reporting a loss of $0.12 a share as revenues drop more than 16% from the year-ago period. Although the stock is up 20% from the lows it hit to end 2011, with innovative products and a market that analysts expect to hit $3 billion in just two years, as the leading equipment provider it should gain significant market share and grow exponentially itself.
With CAPS member VTDave seeing Infinera continuously bringing advanced technology to bear on the industry, dobro751 sees Infinera owning the field: "It has a proprietary technology with regard to the transmission of data (PIC) and there appears to be no one on the horizon with anything to rival it."
Let us know in the comments section below what you think of Infinera and add it to your watchlist to see whether it hits the big-time again.
Solar's sticky wicket
If there's a bullish case to be made for JA Solar and other solar shops like First Solar and ReneSola (NYS: SOL) , it's a short-term one predicated on Germany's looming midyear tariff cut. Past cuts have pulled sales forward to beat the tariff drops, just as they did at the end of 2011. But with each successive tariff reduction, there are fewer and fewer sales to pull forward -- and with Germany planning to move to monthly cuts rather than semiannual ones, the phenomenon may soon disappear.
Germany represents ReneSola's biggest market in Europe, though it's dwarfed in size by the amount it sells into China. Yet that's no salve either, since China faces import quotas from the U.S. It was cheap Chinese pricing that was blamed for the downfall of Solyndra. Some analysts feel solar shops will start assembling panels outside of China if the quotas go through. First Solar also realizes significant sales in Germany as does JA Solar, which counts the country second only to China, so it will find itself in the same boat as ReneSola.
Although there are exceptions to every rule, CAPS member pchop123 says JA Solar is not exceptional, suggesting it will fall like the rest of the sector once the junk rally in solar fades. I tend to agree and marked it on CAPS to underperform the market, but let us know in the comments section below if you think its future is cloudy, and follow developments as they occur by adding it to the Fool's free portfolio tracker.
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.
While you're at it, see the one stock The Motley Fool thinks is changing the face of business. The new special free report highlights the only tech stock you'll ever need to own, and it's yours free for the asking! But only for a limited time, so act now.
At the time this article was published Fool contributor Rich Duprey holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of First Solar and Infinera. Motley Fool newsletter services have recommended buying shares of Infinera, First Solar, and Acme Packet. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.