5-Star Stocks Poised to Pop: Sims Metal Management

Market-trouncing returns could be written in these five stars.

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By Brian D. Pacampara

updated 4:40 a.m. ET Nov. 4, 2009

Based on the aggregated intelligence of 140,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, metals and electronics recycler Sims Metal Management (NYSE: SMS) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Sims' business and see what CAPS investors are saying about the stock right now.

Sims facts

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Headquarters (Founded)	New York City
Market Cap	$3.38 billion
Industry	Steel
Trailing-12-Month Revenue	$7.78 billion
Management	CEO Daniel Dienst (since 2008) CFO Robert Larry (since 2008)
Return on Equity (Average, Past 3 Years)	11.8%
Cash/Debt	$62.6 million / $157.8 million
Dividend Yield	1.7%
Competitors	U.S. Steel (NYSE: X) Nucor (NYSE: NUE) Allegheny Technologies (NYSE: ATI)
CAPS Members Bullish on SMS Also Bullish on	Freeport-McMoRan (NYSE: FCX) Chesapeake Energy (NYSE: CHK)
CAPS Members Bearish on SMS Also Bearish on	Bank of America (NYSE: BAC)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 98% of the 270 members who have rated Sims believe the stock will outperform the S&P 500 going forward. These bulls include KatWoman50 and greenfuture.

Earlier this year, KatWoman50 tapped Sims as a particularly solid way to go green: "Largest metals recycling company with global presence. Down with the rest of the economy but will come back strong. Good "green" business with smart management."

In a more recent pitch, greenfuture also advised Fools to start getting scrappy:

[Sims'] earnings have been slaughtered by the recession, but as global economic growth returns, the demand for metals with a low carbon footprint -- a commodity in which [Sims] is a global leader -- will grow even faster than the demand for metals in general. When [Sims] returns to pre-recession earnings of $2.50 within a year or three (current hard-to-find estimates are for ~$1 by June 2011), its [share price] should ramp up into the $40s, $50s and beyond.

What do you think about Sims, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. The CAPS community is waiting to hear your opinions. CAPS is 100% free, so get started!