5 All-Star Stocks on Fire

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 whom do you dish the rock to?

Your first thought might be the resident superstar -- the Kobe Bryant or LeBron James. 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.

But momentum by itself will only get you so far. What sounds more interesting to me than simply looking for stocks that have momentum is finding high-quality stocks that also have some positive inertia on their side. It's like kicking the ball out to Michael Jordan or Larry Bird when they do have a hot hand.

To find these high-quality winners, I cross-referenced a pretty simple momentum screen with data from The Motley Fool's new investing community, CAPS. The result is a starting lineup of 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 (NASDAQ:GRMN)

143.7%

4.1%

*****

Smith International (NYSE:SII)

81.0%

3.2%

*****

Thermo Fisher Scientific (NYSE:TMO)

38.9%

2.7%

*****

Goodrich (NYSE:GR)

60.1%

1.8%

*****

Agrium (NYSE:AGU)

99.0%

2.9%

*****

Sources: Yahoo! Finance, Capital IQ, and CAPS as of Sept. 10.

At first glance, this sure looks like a high-quality group. But, as always, I highly advise taking a close look before you throw a bounce pass in the direction of any of these stocks.

Still the one
Back in July, I highlighted Garmin in this very same column. At the time, the stock was right at its 52-week high and was up a whopping 70% from the prior year. And it wasn't even close to done -- since then, the Stock Advisor pick has continued to streak upward, tacking on another 35%.

Working in Garmin's favor was an earnings release back in early August that blew away Wall Street's expectations. Fellow Fool Rich Smith was all over the earnings announcement; he pointed out that it was largely strength in sales associated with auto and marine vehicle purchases that boosted Garmin's numbers. He also noted that the company seems confident enough in the future that it is bulking up its overseas manufacturing capacity.

I'm sure it's also helped Garmin's stock that investors are fleeing from many currently troublesome sectors of the economy, such as homebuilding and finance. It seems like a lot of those dollars on the run are seeing technology as a safe home for now, and have been pushing up quality tech names like Garmin and Cisco (Nasdaq: CSCO  ) , which I covered last week.

The huge price run-up notwithstanding, fans continue to pour in on Garmin's CAPS page. Discinplay, who's ranked in the top 5% of all CAPS players, gave the stock a thumbs-up on Friday, calling it the "best of breed" in its industry. Another highly ranked recent Garmin bull is GregoryMoore, who notes the spread of GPS technology "in cars, handheld devices, and even sports watches."

So does Garmin deserve a place on your All-Star team? You can share your thoughts on it, or check out more of what your fellow Fools had to say about it or any of the other stocks above, by stopping by CAPS. And while you're there, you can also take a peek at few more of the 5,000 other rated stocks.

I think I heard a "booyah" somewhere out there -- thanks, Stuart Scott!

More CAPS Foolishness:


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