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Sunday, June 21, 2009

5 Stocks Worth Searching For

What stocks are people searching for? Here's one that might surprise you.

Is the sour economy causing more people to cook at home? If so, maybe that's what's fueling the demand for cookware from Newell Rubbermaid (NYSE: NWL). The company reports that sales for its Calphalon line of pots and pans, kitchen tools, and small electrics has risen so much that it's suspending employee discounts on the products. According to an analyst's report, Calphalon sales have exceeded Newell's expectations over the first six months and now account for some 3% of the company's sales.

Although it's perhaps best known for its plastic storage bins and containers, Newell Rubbermaid also owns such popular brands as Rolodex, Sharpie pens, Graco car seats, and, of course, Calphalon. Thus, it competes against the likes of Fortune Brands (NYSE: FO) and Jarden (NYSE: JAH) in the household-goods market.

Shares trade for about half of where they were a year ago, or less than 10 times next year's earnings. Net sales increased 7.8% last quarter, and with full-year earnings guidance of $1.40 to $1.60 per share and analysts forecasting a $1.49-per-share consensus, Newell has a chance to beat when it reports earnings at the end of the month.

What's hot, what's not
Newell Rubbermaid is just one of several stocks investors have been prowling the Internet for recently. Below are a few more hot stocks we've found by watching Google's search trends, which we then pair up with the ratings from the Motley Fool CAPS community. Over the first 20 months since we began tracking the collective intelligence, the data shows that newly minted five-star stocks offer the best opportunities for investors, while the lowest-rated companies fared the worst. A five-star rating is the highest a company can get in CAPS.

By adding in some performance measures for the past year, we can get a handle on how they're expected to do in the future. Here are a few topping the search engine.

Stock

CAPS Rating

Return on Capital, Past 12 Months

Long-Term Growth Estimate

Newell Rubbermaid

*****

10.4%

8.8%

Petroleo Brasileiro (NYSE: PBR)

*****

17.9%

11.7%

PMI Group (NYSE: PMI)

*

(22.2%)

10.0%

ReneSola (NYSE: SOL)

*****

10.0%

28.0%

Transocean (NYSE: RIG)

*****

13.9%

26.7%

Sources: Google Finance, Capital IQ (a division of Standard & Poor's).

Quick shots
Whether it's irrationality over the nation's financial situation or fears that high oil prices are ruining the economy, the markets have beaten down a whole host of stocks. CAPS member SHavill thinks superior companies such as Transocean will have to wait for a while until it can rebound. "With oil stocks being hammered so badly the oil related companies have been pulled back beyond all reason. RIG has gone to 2003 levels and I can only think that when rational investing returns this stock will shine."

That seems to be the consensus view of the bulls on CAPS regarding Motley Fool Income Investor recommendation Petrobras, whose involvement with the Tupi oil-field discoveries off the coast of Brazil causes tingles of anticipation. The finds hold somewhere between 50 billion and 80 billion barrels of oil between them -- valued by some analysts in the trillions of dollars -- and could make Brazil, not to mention the companies tapping the oil, very rich.

That's why the separation of the markets from reality has CAPS member sumbawa viewing Petrobras' potential greedily.

Oil's been on some wild swings these last weeks. Probably a lot of speculative money coming out of the market. The fundamentals are still in place though and many oil company stocks have fallen too far. [Petrobras] has some of the best prospects in the business.

Seek and ye shall find
It takes more than a brief glimpse and a few All-Stars searching amongst the ruins of the market to make buy or sell decisions. So start your own research on these stocks on Motley Fool CAPS, where your opinion can sway others. While you're there, you can 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.

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