No one has perfect foresight, but let's be honest: The
market is full of people who, as Oscar Wilde would say, know
"the price of everything and the value of nothing." Far too
often -- over the past year especially -- investors have been
pitched sensational stock recommendations only to be left
high and dry as shares crumble.
To hunt down top-recommended stocks that have been
rewarding investors accordingly, I summoned ourÂ
Motley Fool CAPSÂ community to point out a few
four- or five-star stocks that have been shootin' for the
moon in recent months. Some are still bargains; others are
getting ahead of themselves.
While not formal buy recommendations, these
three-month bloomers caught my attention:
Company
13-Week Price
Change
Recent Share
Price
Forward P/E
Ratio
CAPS Rating
Â
(out of 5)
Caterpillar
(NYSE: CAT)
76%
$53.05
28.6
****
Costco
(Nasdaq: COST)
30%
$58.03
18.4
****
General Electric
(NYSE: GE)
50%
$16.33
17.8
****
Halliburton
(NYSE: HAL)
49%
$28.97
21.5
****
Intuitive Surgical
(Nasdaq: ISRG)
78%
$254.00
38.5
****
Data from Motley Fool CAPS, and
Yahoo! Finance as of Oct. 12.
You can rerun the CAPS screen I used byÂ
clicking here.
A closer look at Costco
I'm tempted to fire off the typical reasons why
investors should love
Costco:
Recessions inspire frugality. Companies that sell cheap stuff
draw those cheapskates in. More customers, even at lower
margins, mean big profit.
All true. But there's more to like about Costco other than
the fact that it can rock while consumer spending is in the
toilet.
Most retail stores follow a simple approach: Buy
merchandise. Sell it for more than you bought it for. Keep
the difference as income. Repeat until wealthy.
Costco's business model is a little different. Rather than
relying on retail margins to juice its bottom line, profit
predominantly comes from membership dues it charges every
customer. You can see the importance of Costco's membership
dues by looking at different components of its income
statement over the past few years:
Segment
2008
2007
2006
Sales Continued... |