The clock's ticking down, your team's down one, you're being double-teamed, and you wouldn't have enough time to get off a good shot even if you were allowed to drop-kick both defenders. So who do you dish the rock to?
Your first thought might be the resident superstar -- the Kobe Bryant or Tracy McGrady. But what if Kobe, as good as Kobe is, is playing colder than an Alaskan snowdrift? That's right, you dish to the guy with the hot hand, the guy who will be deemed en fuego tomorrow on ESPN.
Momentum investors are looking for stocks in a similar state of sizzle when they make investments. They want to give the nod to the stocks that are hot to the touch.
What sounds more interesting to me than simply looking for stocks that have momentum, though, is finding high-quality stocks that also have some positive inertia on their side. Imagine being able to kick the ball out to Michael Jordan or Larry Bird when they do have a hot hand.
To accomplish this, I cross-referenced a pretty simple momentum screen with data from The Motley Fool's new investing community, CAPS. The result is a few all-star stocks that all currently have a fiery shooting hand. Each of the companies below is up 30% or more over the past year, is within 5% of its 52-week high, and has been rated highly by CAPS players.
|
Stock |
12-Month Change |
Percent Below 52-Week High |
CAPS Rating (out of 5) |
|---|---|---|---|
|
Garmin |
70.3% |
0.0% |
***** |
|
Foster Wheeler |
168.3% |
0.6% |
***** |
|
LoopNet |
120.3% |
1.0% |
***** |
At first glance, this sure looks like a high-quality trio. But as always, I highly advise taking a close look before you throw a bounce pass in the direction of any of these stocks.
Grabbing Garmin
If you've ever ended up driving around in circles, you likely wished you had one of Garmin's GPS systems. Though a heck of a lot of investors have already recognized the strength of the Garmin story, the company has delivered when it comes to results. Over the past year (ending in March), Garmin's earnings per share are up 61%.
CAPS All-Star noryakerson is one of the 2,320 CAPS players who have given Garmin the thumbs-up. noryakerson shares:
GPS technology will become as ubiquitous as the labels on all our material possessions, and as important as proper nutrition for safeguarding children and pets. Garmin is the leader in this industry and will continue to lead for the next 5-10 years. [Garmin is] a great value now. A strong buy in my opinion.
Rolling with Foster Wheeler
PartyMDK thinks Foster Wheeler is still a good buy after its big run. He says:
They continue to grow backlog and if their power division meets expectations they could continue to smash estimates. Global infrastructure is still a good market and [Foster Wheeler] will be a leader over the next year or two.
As my fellow Fool Dave Mock reported back in early June, Foster Wheeler's run has been fueled by, well, fuel. The company's largest segment, global engineering and construction, builds and engineers infrastructure for the oil and gas industry. And with global energy demand only continuing to grow, Foster Wheeler may still have plenty of business headed its way.
Looping back to real estate
By now, we've all pretty much realized that residential real estate has run too far too fast over the past few years. Though the correction has already started, it's likely that home prices and homebuilders like KB Home
This is no sweat off the back of LoopNet, a recommendation of both Hidden Gems and Rule Breakers. The company is a major online marketplace for commercial real estate and has seen its sales jump 54% over the past year.
CAPS All-Star kwfisher is a commercial real estate broker and says that "LoopNet is fast becoming the choice of both commercial brokers and private buyers for sourcing commercial real estate acquisitions and sales." He thinks that it could be a "market beater over the next several years."
And that's the team for this week. You can check out more of what your fellow Fools had to say about these stocks by stopping by CAPS, and while you're there, you can also take a peek at few more of the 4,700 other rated stocks.
I think I heard a "booyah" somewhere out there -- thanks, Stuart Scott!
More CAPS Foolishness:
Garmin is a Stock Advisor pick. LoopNet is a Hidden Gems selection. You can check out either newsletter with a 30-day free trial.
When it comes to basketball, Fool contributor Matt Koppenheffer might be the guy Ron Shelton was thinking of when he came up with the title White Men Can't Jump. He does not own shares of any of the companies mentioned. The Fool's disclosure policy has a 55'' vertical jump and can dunk from half court. Or so I hear.
