The market had a torrid run in 2009. This year, however, has brought a downdraft, with greater volatility and risk aversion. While there could be greater corrective moves on the horizon, these moves are likely to be driven by short-term factors. After such a long run with nearly no corrections, a market pullback is healthy and brings valuations down.

It’s environments like these that present the greatest opportunities for investors who have built serious watch lists of stocks. Pullbacks create more attractive entry points for investors. As such, if you research and build a list of stocks you want to own, all you’ll need to do is wait until each stock reaches your preferred price to pounce. The volatility in this environment should provide you with opportunities to do exactly that.

To start assembling my very own stock wish list, I used the Fool's CAPS screener to find premium companies such as ExxonMobil, which has outperformed the S&P 500 by 9.5% per year on average for the past 10 years.

To screen for some of the market's best stocks, I used the following criteria:

  • Market cap greater than $10 billion, which suggests stability.
  • A current ratio of at least 1, to ensure sufficient liquidity to meet current liabilities.
  • Return on equity north of 15%, to demonstrate efficiency and profitability.
  • A five-star rating, our 150,000-plus-member CAPS community's highest rank.

Here are some of the companies I pulled from the results of my scan:

Company

Return on Equity (TTM)

Market Cap (in billions)

Current Ratio

Air Products & Chemicals (NYSE: APD)

16.3%

$14.6

1.3

Infosys Technologies (Nasdaq: INFY)

26.8%

$32.2

5.9

Johnson & Johnson (NYSE: JNJ)

25.4%

$174.6

1.8

PepsiCo (NYSE: PEP)

35.5%

$97.8

1.4

Schlumberger (NYSE: SLB)

16.4%

$72.7

1.9

Waste Management (NYSE: WM)

15.8%

$16.0

1.0

Data from Motley Fool CAPS as of Feb. 26. TTM = trailing 12 months.

While the CAPS screener can suggest all kinds of promising companies, running a screen should be only the first step in your stock research. Come join our CAPS online investing community (it's totally free) to delve further into these companies, and see whether they're right for your portfolio.

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