Editor Amy Calistri spent 24 hours eavesdropping, snooping, and even stalking to find her next big investment idea. Read on to learn what stock she found with +43% annual returns.


 

 

Spanish Train Manufacturer Delivers +498% Returns With Room to Grow
-- By Amy Calistri

In less than 24 hours of eavesdropping, probing, and stalking, StreetAuthority's Stock of the Month editor Amy Calistri uncovered a number of potential investment prospects -- including a stock that's returned +498% in the last five years.  

You can run stock screens and watch CNBC all day long, but sometimes the best way to come up with winning investment ideas is to get out into the world and start asking questions. To show you how it's done, we asked our ace investment snoop to share just one of her stock sleuthing days with us.

Being Nosey Pays Off:

While I do spend a considerable amount of time in front of my Bloomberg terminal researching stocks, some of my most profitable ideas were borne from a casual conversation with strangers.

For instance, nearly 10 years ago at a break at an economic conference, I started chatting with two attendees. Inspired by that chat, I did more research and made my very first investment in an oil and natural gas company. Factoring in my realized and unrealized gains, that investment has delivered +650% to date.

Don't be discouraged by the number of leads you end up discarding. You just have to keep at it. You'll learn to recognize a gem when you come across it. Of course these days, I save my best ideas for my Stock of the Month newsletter.

I chose one Saturday as my official StreetAuthority investment-snooping day. As you'll see, I learned a lot, discarded a few ideas on the spot, and found a potential winner along the way. Here's what one day of snooping turned up:

A Profitable Idea:

A nicely-dressed older man sat at the bar drinking a club soda. His English was excellent, but I detected a slight accent.

At one point he got up to have a smoke outside. I followed him.

I sat down on a bench and nodded. Once we started our chat, I learned he worked for a Spanish train manufacturer, Construcciones y Auxiliar de Ferrocarriles -- or CAF for short. The stock trades on a number of foreign stock exchanges, so it may take a little more work for U.S. investors to access it. But I've found the discount broker E*Trade to be very helpful when looking to execute foreign trades.

Among its many international successes, CAF supplied the high speed train that runs from Ankara to Istanbul. In March, it was awarded a $320 million contract for the supply and maintenance of 103 trams in Houston. This was the idea I took home with me.

Although we only exchanged first names, a little more sleuthing on Google images uncovered the stranger's identity: Jose Maria Baztarrica Garijo, CAF's Chairman of the Board.

CAF's stock has gained +498% in the last five years -- that's an average annual return of +43%. The company has grown its dividend by +81% over the last three years, and is valued at just under 11 times earnings.

Analysts think the company's growth will slow over the next five years, but the CAF seems to be working awfully hard to grow revenues. Growth in Spain has pretty much plateaued, but the company has grown revenues by +30% elsewhere in the last two years. 

For a sleuthing expedition, CAF was a good find. I'll devote more time to research what the company has in the pipeline near term, but it's made a solid first impression. And besides, I have time -- I've already picked my August Stock of the Month. It's an investment that will help solve a global crisis -- and deliver solid gains in the years ahead.        
 
Always Searching for the Next Great Idea...

-- Amy Calistri
Editor
StreetAuthority Stock of the Month

P.S. You can get Amy's best finds for just $19.95. Her recent discoveries have earned Stock of the Month subscribers +17.3%, +29.7%, and +31.7% in less than 5 months. It's not too late for you to get on board. Go here to join now.