5 All-Star Stocks on Fire

When the clock's ticking down and the game's on the line, which of your teammates 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 are looking 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 Change

Percent Below 52-Week High

CAPS Rating (out of 5)

Coca-Cola FEMSA (NYSE:KOF)

62%

1.5%

*****

CSX (NYSE:CSX)

35%

0.0%

*****

AFLAC (NYSE:AFL)

34%

4.6%

*****

Genesee & Wyoming (NYSE:GWR)

34%

0.0%

*****

Gilead Sciences (NASDAQ:GILD)

33%

0.6%

*****

Sources: Yahoo! Finance, Capital IQ, and CAPS as of March 24.

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

Coke's relative
In sports, you can often find promising prospects by tracking down relatives of former successes in the athletic field. In baseball, for example, Detroit Tigers slugger Gary Sheffield is the nephew of former Mets fireballer Doc Gooden. And fans of NCAA basketball have recently been treated to the skills of former NBA star Dell Curry's son, Stephen Curry, in the NCAA basketball tournament.

CAPS players have found similar success by jumping on Coca-Cola FEMSA, a subsidiary of FEMSA (NYSE: FMX  ) and the second-largest bottler of Coca-Cola (NYSE: KO  ) products in the world. CAPS All-Star dbhealy, a Coca-Cola FEMSA bull, broke it down simply: "Coke in South America = 2nd chance to make money with a proven brand."

Coca-Cola FEMSA certainly isn't Coca-Cola -- the unmistakable Coke formula will allow Coca-Cola to earn excess returns well into the future, and the Coke bottlers have no claim to that. But in its favor, Coca-Cola FEMSA has a product that practically sells itself in an economically dynamic region of the world. The company bottles and distributes popular Coca-Cola brands like Coke, Fanta, Sprite, Dasani, and Powerade in Mexico, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Argentina, and Brazil. Some of these countries are among the fastest-growing in the world, which means that their inhabitants have more money to spend on things like Coke products.

The company has shown solid growth, and it expanded sales and earnings per share by 20% and 42%, respectively, in 2007. Though its operating margin of 16.5% is well below Coke's 26%, it's nonetheless very profitable. Coca-Cola FEMSA can also be picked up for a much lower price than its larger forefather -- while Coke trades at 23 times its trailing earnings, Coca-Cola FEMSA fetches just 17 times.

So do you think Coca-Cola FEMSA 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 also take a peek at few more of the 5,500-plus other stocks that are rated on CAPS.

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

More CAPS Foolishness:


Read/Post Comments (0) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 605952, ~/Articles/ArticleHandler.aspx, 10/24/2014 2:28:15 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement