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
|lovehut||93.57||Netflix||378.02||Corning (NYS: GLW)||*****|
|symie5||95.37||Under Armour||200.99||Sirius XM Radio (NAS: SIRI)||**|
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.
Hiding in plain sight
While display-glass maker Corning is busy setting expectations for future growth and profitability, the market reset its stock price last summer and has kept the pressure on ever since. Demand for LCD TV screens, the primary driver of sales and earnings for Corning, has been weak and doesn't look to be getting any better. That was the reason behind its "reset" talk during its January conference call. Yet even though it's going to see narrower margins as a result, Corning is taking the appropriate measures of cutting its prices both as a means to gain sales as well as maintain share.
Despite weaker-than-expected demand for flat-panel displays in Asia, even analysts can't say for certain what if any growth there will be. Many expect around 7% growth or so, but NPD Display Search sees it closer to 2%. Then there's the issue of worsening pricing on display technologies products, which Corning is addressing.
But there are bright spots, too, that the market seems to be missing. As a feature of the iPhone, Apple (NAS: AAPL) continues selling fistfuls of units, and the possibility of an iPhone 5 that's LTE capable has Sprint Nextel (NYS: S) upgrading its network to support the $15 billion worth of iPhones that it's guaranteed Apple it will sell.
That's evident in the 19 million miles of fiber optic cable telecoms rolled out last year, leading Corning to tell customers it can't guarantee orders will be filled. As video content streaming becomes more prevalent, there will be even more demand. Analysts say Netflix is driving that growth right now, accounting for nearly 33% of all peak downstream Internet traffic. As one of the biggest suppliers of fiber optic cable, Corning's sitting pretty.
The myriad of products Corning is involved in will sustain it through the tough times, says CAPS member davidkware: "The glass market has hurt the short-term outlook for Corning, but solid management and the strong internal valuation of the company in addition to the pantheon of products it provides should provide long-term growth. The dividend is just an added incentive."
Add Corning to your Watchlist to see whether investors are willing to see the opportunities present for the glass specialist.
Going into orbit
Satellite-radio operator Sirius XM Radio reported better-than-average revenue-per-user statistics last quarter, which helped drive significant earnings-per-share improvement, and allowed it to notch $0.07 per share in profits for the full year, compared with a penny in 2010. Not surprising, then, that Liberty Media (NAS: LMCA) wants to gain a controlling interest in the programmer, even if Sirius itself is fighting the effort. Liberty sees future growth is inevitable, if not imminent.
Automobile sales contribute an enormous portion to Sirius' success and all reports are good on the automobile home front for this year. Vehicle sales have been a strong wave Sirius has ridden on for the past few years. Analysts pinned auto sales as responsible for a growth of nearly 10% in customer base in Sirius subscribers last year. It's safe to say, Sirius still rules the rule the road, especially in the face of competitors like Pandora vying for a spot of automobile media.
Add the satellite-radio operator to your Watchlist, and let us know on the Sirius XM Radio CAPS page whether you agree it will be able to rev up its growth engine.
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.
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At the time this article was published Fool contributorRich Dupreyowns shares of Apple, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Apple.Motley Fool newsletter serviceshave recommended buying shares of Corning, Netflix, and Apple and creating a bull call spread position in Apple. The Motley Fool has adisclosure policy. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.