When the clock's ticking, and the game's on the line, which teammate do you trust to sink a winning shot? Sure, you could dish the rock to your resident superstar -- but what if he's playing ice-cold at the moment? So you pass to the guy with the hot hand, the one who'll be deemed en fuego tomorrow on ESPN.
Momentum investors look for stocks in a similar state of sizzle. But momentum by itself will get you only so far. I prefer to find high-quality stocks that also have some positive inertia on their side. It's like getting the ball out to your team's superstars when they do have a hot hand.
To find these league-leading winners, I cross-referenced a simple momentum screen with data from the Motley Fool CAPS investing community. Each of the companies' stocks below has risen 30% or more over the past year, now trades within 5% of its 52-week high, and has a high rating among CAPS players.
|
Stock
|
12-Month Change
|
Percent Below
52-Week High
|
CAPS Rating
|
|
Potash Corp. of Saskatchewan (NYSE: POT )
|
191%
|
4.9%
|
****
|
|
Cal-Maine Foods (Nasdaq: CALM )
|
140%
|
4.9%
|
****
|
|
Petroleo Brasileiro (NYSE: PBR )
|
131%
|
4.4%
|
*****
|
|
BioMarin Pharmaceutical (Nasdaq: BMRN )
|
103%
|
4.6%
|
*****
|
|
Apollo Group (Nasdaq: APOL )
|
84%
|
3.6%
|
****
|
Sources: Yahoo! Finance, Capital IQ (a division of Standard & Poor's), and CAPS as of Feb. 4.
At first glance, this sure looks like a high-quality group. But, as always, I advise taking a close look before you throw a bounce pass in the direction of any of these stocks.
A Brazilian behemoth
There are 14 stocks trading on U.S. exchanges that have a market cap of $200 billion or more, and at $250 billion, Petroleo Brasiliero -- also known as Petrobras -- is one of them. That's right -- this Brazilian oil and gas giant is up there with the likes of Microsoft, AT&T, and Berkshire Hathaway.
And not only is it massive, but it's also been a very highly regarded stock. Ken Heebner, who runs the very successful CGM Focus fund, has been a big proponent of Petrobras and recently highlighted the stock in a Forbes feature. On CAPS, the stock has a huge following, with 1,199 outperform ratings against just 15 underperforms. So why all the excitement? CAPS player digdug62 chimed in over the summer:
Petrobras has very little real competition on its home turf (Brazil) which is one of the very few places left in the world where billion barrel scale fields are likely to be found in the near future. The only other two areas in the world with this kind of exploration potential are Libya and the circum-Caspian (both much more politically difficult). I know a little something about this since I am an exploration geologist and have worked in both Brazil and Libya.
Given the company's excellent location and economically healthy home market, I agree with a lot of the bullishness around Petrobras the company. But I am not quite as convinced when it comes to its stock. On a relative basis, the stock has gone up much faster than other major foreign energy players, such as PetroChina (NYSE: PTR ) and YPF, as well as U.S. energy majors such as Exxon Mobil and Chevron (NYSE: CVX ) . That run-up has made Petrobras stock start to look a bit expensive.
So do you think Petrobras deserves a place on your All-Star team? You can share your thoughts on it, or you can check out more of what your fellow Fools had to say about it -- or any of the other stocks we've mentioned here today -- by stopping in at CAPS. And while you're there, you can also take a peek at few more of the 5,000 other stocks that have ratings.
I think I heard a "boo-yah" somewhere out there -- thanks, Stuart Scott!
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