High-Priced Stocks Worth Every Penny

Penny stocks are�one way to double your money, though it's fraught with risk. But there are equally shiny opportunities trading at the other end of the price spectrum. I call 'em "three-digit stocks," yet if they're anything like�Berkshire Hathaway, they can trade in the four-, five-, and six-digit range, too.

A�penny stock�might not be a good buy simply because it's cheap, and a three-digit stock shouldn't scare you away just because it carries a hefty price tag. Handsome is as handsome does. Let's check in with the�Motley Fool CAPS�community to see which of the high-priced stocks below earn the greatest confidence from our investor intelligence database:

Stock	CAPS Rating (out of 5)	3-Digit Price	Return on Capital (TTM)
China Petroleum & Chemical (NYSE: SNP  )	***	$106.79	11.0%
Google (Nasdaq: GOOG  )	****	$633.14	13.3%
McDonald's (NYSE: MCD  )	*****	$100.15	19.7%

Source: S&P Capital IQ; Motley Fool CAPS. NA = not available. TTM = trailing 12 months.

But just because these stocks are purring is no reason to jump into them blindly. Catching a tiger by the tail -- or a knife falling from on high -- can leave you scratched and bleeding. That's why we recommend you use this list as a launch pad for your own research and analysis.

Highfalutin' honeys
Advanced extraction techniques like horizontal drilling generated a lasting boom in natural gas exploration that catapulted Chesapeake Energy (NYSE: CHK  ) to the forefront of the industry, but has furthered ancillary ventures like the pipeline and storage business of Kinder Morgan Energy Partners and fueled the hopes of natural gas engine maker Westport Innovations (Nasdaq: WPRT  ) . It's even given rise to Cheniere Energy's (NYSE: LNG  ) plan to export natural gas liquids.

While the U.S. has been the leader, investors would do well to keep tabs on emerging economies like China that heretofore relied upon abundant coal reserves for much of their energy needs, but will likely learn to tap their own natural gas assets, which are estimated to be even larger than ours.

China Petroleum & Chemical is pitted against CNOOC in an effort to take over Texas hydraulic fracturing firm Frac Tech, which will give the winning bidder the technology to produce a domestic natural gas boom. Although contentious here, environmental concerns are much lower on the priority list in China and fracking could supplement other advanced efforts to wean the country away from coal.

Certainly the CAPS community agrees with the prospects at Sinopec, with 95% of the 1,111 CAPS members rating it marking it to outperform the market indexes. Add China Petrochem to your watchlist�to see if its future is fractured or if it will grow as one, big cohesive unit.

Not so smart?
We've heard this story before: Someone is coming out with the next killer product that will knock Apple (Nasdaq: AAPL  ) off its throne. It has yet to happen, but some believe Google's entrance into the tablet computer market could herald the introduction of the "iPad killer." Google's CEO says an Android tab "of the highest quality" will be available within six months.

I'd guess tablet makers like Asus and Motorola Mobility would have something to worry about, moreso than Apple. Oh, wait! Google is in the process of buying Motorola, so maybe it's learned something from the Xoom's failure to gain much traction. The tablet was unveiled with lots of fanfare, but sales have been lackluster to say the least. It sold just 100,000 units in the third quarter, a rounding error on the 11.1 million iPads Apple sold.

Android tablets account for 27% of the market, according to the researchers at Strategy Analytics, and maybe a classy introduction by Google is what the Android segment needs to capture an even larger slice, but I'm not expecting Apple to lose its spot atop the world anytime soon (Apple's share is based on units sold; Android's is on units shipped, a big, gaping caveat).

Yet even if its tab doesn't dethrone the iPad, CAPS member NJ7 says it's still an innovative leader with room to grow:

But while I do think a day of reckoning for rising share prices will come, its top dog status in search engines/coolness (it's worth your time to type "let it snow" into the search field), its nonconformist thinking with great new products, and the rise of Android will continue to propel Google forward long-term.

Add your thoughts in the comments section below or on the�Google CAPS page, and put it in the Fool's free portfolio tracker to see if it becomes the usurper some expect.

A razor's edge
McDonald's sits on its own throne, and though it has plenty of rivals, no one is even close to matching the growth prospects and value proposition it represents. For a company with a market cap that exceeds $100 billion, the 34% jump its shares have enjoyed in 2011 is remarkable no matter how you feel about fast food. Can it repeat that in the coming year?

McDonald's derives just 22% of its revenues from Asia, the Middle East, and Africa, meaning there is still a huge runway before it that shouldn't be limited by raising prices in response to higher commodity costs and labor expenses.

CAPS member meeyatch69 says the burgermeister has qualities that resonate no matter where you travel:

In tough times, during a down economy, people love to go to McDonalds. When times are good...people love to go to McDonalds. If you have children at all, you're almost required to hit it up at least once every ten days... and don't get me started on college kids.

Add McDonald's to your watchlist and see if the heady growth it has already enjoyed is just a portent of things to come.

Count to 10
These three-digit stocks might be on their way to even higher valuations, but check out two small-cap stocks The Motley Fool found that have the potential to give investors multibagger returns. Check out The Motley Fool's free report "Too Small to Fail: 2 Small Caps the Government Won't Let Go Broke."�Get access�to detailed analysis of these two companies -- it's�completely free.