Get Ready for the Fall?

"The bigger they are, the harder they fall." This old saying sums up the worst nightmare of every homeowner, every gold buyer, and every investor in today's market. Dare ye buy at the top?

Every day, MSN Money publishes a list of the market's top stocks -- the companies whose shares have just hit their highest intraday price of any time in the past 52 weeks. Every day, investors read this list and tremble -- some with greed (big mo', baby!), and others in pure, unmitigated, acrophobic terror (whatever you do, don't look down).

Over on Motley Fool CAPS, thousands of investors just like you are watching these same companies and voting their gut on whether they'll keep rising or stumble and fall. Usually, the ratings wax optimistic as stocks hit new highs -- after all, everyone loves a winner. But what do you do when some of the smartest investors out there are panning a hot stock?

You could heed them. You could ignore them. You could take the stock tickers and construct anagrams from 'em. For my money, though, the best course of action is to use the "52-week highs" list as just a starting point for further research. After all, stocks can go up for many reasons, and it's up to you to decide how worthy those reasons are. But thanks to Motley Fool CAPS, now you don't have to make the decision alone.

With that said, let's meet today's list of contenders, drawn from the latest "52-week highs" list at MSN Money. What does our panel of more than 25,000 stock gurus (and counting) have to say about them?

Foreign gains currency
A few things jump out at you from today's list. First, once again it seems that international stocks are in favor. Attempting to compile a list comprised entirely of American depositary receipts pulled from MSN's "hit list," I was met with a veritable cornucopia of equity choices. I couldn't even fit all of this week's skyrocketing ADRs into the seven slots available, and had to leave companies like Mitsui, Bayer Schering, and UES of Russia for another day. Second, not only are international stocks in general in favor, but dividend-paying international stocks in particular. Not one, not two, but three of the companies listed above have been featured in the Fool's own Income Investor newsletter. (Which ones? Surprise! We picked the top three.)

Of course, in this column, we're looking not for winners that will keep on winning, but for stocks that may have gotten a bit ahead of themselves, and are at risk of taking a tumble. Hitachi clearly gets the least respect on CAPS, so I'd ordinarily be inclined to pick on that one -- except that it gets so little respect that only 25 CAPS players have rated it, and only one contributed a "pitch" explaining his rating. So Hitachi gets a pass this week, as we move on to the next-worst-rated stock.

The bear case on Wimm-Bill-Dann
I admit to having a personal acquaintance, and a bit of a love/hate relationship with Wimm. On the one hand, I love the product (that's the personal acquaintance.) The Wonder Milk, the J-7 Juice, and the kefir (ah, the kefir!). I've got just one word for this tri-worded company: Yum! I also love the company enough that about a year ago, I recommended it to readers of The Motley Fool's International Stocks Report.

But on the other hand, when I recommended Wimm, the stock was trading for about $25 and change. With shares having since tripled in price, I'm a bit less enamored of it. So without further ado, let's lead off today's survey of Foolish stock bashers with my own CAPS pitch on Wimm:

• TMFDitty: "Forgive me, Fools. I've sung Wimm-Bill-Dann's praises in the past on numerous occasions. But the stock price has risen to far, too fast. Wimm-Bill-Dann is a strong company and, at the right price, a likely buyout candidate for Coke, Pepsi, or Danone. But that price isn't right today, for them or for you. Sell Wimm-Bill-Dann."
  
  
• Focusing less on the price, and (most Foolishly, I might add) more on the business, CAPS player EScroogeJr argues that Wimm's "revenue limit has been reached," i.e., it's grown about as big as it's going to get. EScroogeJr also notes that with Wimm attributing much of its recent rise in profits to "inflation, exchange rates and a change in product offerings... margins are unlikely to grow further."
  
  
• Finally, NetscribeConsGds worries that "intense competition is eating up [Wimm's] market share in traditional dairy products, yogurts, and dessert daily products. The company has faced the pressure of rising milk prices and banned imports of animal products from Ukraine since January 2006; which aggravates the plight of the company."

Are we right? Are we wrong? If you've got an opinion on the stock, here's your chance to share it with the world. Click on over to CAPS and drop your $0.02 in the collections box (just a figure of speech. Playing CAPS is, of course, absolutely free.)

Posco, National Grid, and Diageo are Motley Fool Income Investor picks, while Coca-Cola is an Inside Value selection. Follow the preceding links to try either newsletter free for 30 days.

Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked 70th out of more than 25,000 raters. The Motley Fool has a disclosure policy.