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Thursday, May 28, 2009

Drink In These 5 Top Stocks

Whether it's the corporate lunchroom, your cubicle, or the local watering hole after work, there are regular places we gather to discuss news, sports, or -- if you're like us -- stocks. Here at Motley Fool CAPS, we gather around the virtual water cooler daily to rate stocks and delve into their merits as investments.

Members of our 130,000-strong CAPS community -- where investors give the thumbs-up or thumbs-down to about 5,200 stocks -- earn points by seeking out the businesses they think will outperform the market. We'll take a look at some of the most talked-about top stocks in CAPS and whether or not you think they'll continue their winning ways.

Stock

CAPS Rating (5 Stars Max)

Number of Calls

% Outperform Calls

Archer Daniels Midland (NYSE: ADM)

****

1,851

93%

Barrick Gold (NYSE: ABX)

****

1,812

94%

CapitalSource

****

1,892

95%

Morgan Stanley (NYSE: MS)

**

1,777

74%

Qualcomm (Nasdaq: QCOM)

****

1,499

92%

A tall drink of water
The same creative geniuses who brought you our financial mess are showing they haven't lost their ingenuity. After the outcry about obscene bonuses granted to executives at American International Group (NYSE: AIG), compensation practices at companies operating on the public dole have drawn closer scrutiny.

Treasury Secretary Timothy Geithner has said that substantial change is needed in compensation, but President Obama's attempt at dictating all pay practices from the White House was met by a chorus of jeers. Caps are coming; we just have to wait to see what form they'll take.

That hasn't kept Wall Street from revamping things on its own. So you've got a problem with bonuses? OK, Morgan Stanley has said it's going to limit them, but only after increasing base salaries. The crib notes to the plan say the outsized pay for failure Wall Street's wizards enjoyed remains essentially unchanged, but allow Morgan Stanley to say it is doing something.

That's good enough for Citigroup (NYSE: C) and Bank of America (NYSE: BAC), who are following right along after Morgan Stanley's lead, initiating their own compensation "reform."

Investors at CAPS remain convinced that Morgan Stanley will emerge as a stronger institution, with 75% of those rating the company indicating that it will outperform the markets. All-Star members are a little less sanguine about Morgan Stanley's prospects, with a little more than two-thirds of them suggesting it will continue to exceed expectations.

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