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 instead, 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 only get you so far. I prefer to find high-quality stocks that also have some positive inertia on their side. It's like kicking 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's CAPS investing community. Each of the companies below is up 30% or more over the past year, now trades within 5% of its 52-week high, and has been rated highly by CAPS players.
|
Stock |
12-Month Return |
Percent Below |
|
|---|---|---|---|
|
China
Medical Technologies |
102% |
5.0% |
***** |
|
China
Unicom |
89% |
0.8% |
**** |
|
Chesapeake
Energy |
48% |
1.0% |
***** |
|
Devon
Energy |
41% |
1.9% |
***** |
|
XTO Energy |
38% |
4.6% |
***** |
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.
Unconventional drilling for your portfolio
It's no secret that energy has been a big hit over the past few years, but what might get lost in the shuffle for many investors is that some of the independent energy players like Devon have outperformed the big boys such as Exxon Mobil
Why have these relative small fries had such success? As fellow Fool Toby Shute pointed out over the summer, many of the nonmajor oil and gas players have been benefiting from unconventional gas production. Devon hasn't shown signs of letting up on the growth pedal quite yet either. Healthy natural gas and oil prices, paired with impressive production gains, have led to five-star level growth in profits.
The stock has more than 700 supporters on CAPS, with a perfect record of 295-and-0 among CAPS All-Stars. One of these All-Stars, jerry1027, is bullish on the oil and gas business in North America:
I am very bullish on energy in general and politically safe oil in particular. With BRIC [Brazil, Russia, India, and China] still doing its thing in support of oil prices and places like Venezuela, Iraq, and Iran helping to do the same in their own fashion, I feel that North America is the place to be in the energy sector for the foreseeable future.
So do you think Devon deserves 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 take a peek at few more of the 5,000 other stocks that are rated on CAPS.
I think I heard a boo-yah somewhere out there -- thanks Stuart Scott!
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