5 Stocks That Just Won't Quit

In my weekly Fool column "Get Ready for the Fall," I run Nasdaq.com's 52-week highs list through the "wisdom of crowds" meter we call Motley Fool CAPS. The result: a list of stocks that have flown so high, investors are starting to get nervous about that whole "gravity" thing. But while many stocks will indeed plunge back to Earth, some seem immune to gravity, steadily riding a rising megatrend to ever-greater heights.

Today, we'll move beyond stocks that have hit 52-week highs, and identify companies now surpassing five solid years of outperformance. Which of these will thrash the market averages for another half-decade? Here are this week's leading contenders:

Companies are selected from the "New 5-Year Highs" list published on MSN Money on Thursday. CAPS ratings from Motley Fool CAPS.

Everybody loves a winner
Well, almost everybody. Of the five stocks hitting five-year highs on today's list, four earn above-average four- and five-star ratings from CAPS members. (Ironically, it's Clean Harbors that prevents a clean sweep.) But there's no contest for the top spot this week. Westinghouse Air Brake Technologies Corp. gets the support of 99% of investors surveyed, which is plenty to earn it CAPS' top prize of a perfect five-star rating.

Hailing from the Rust Belt city of Wilmerding, Pa., and bearing a name straight out of the Industrial Revolution, Wabtec is the furthest thing from the kind of tech rocket stock you might expect to find headlining this list. But its products are ideally suited for a nation that's falling back in love with railroads. With stocks like CSX (NYSE:CSX) and Union Pacific (NYSE:UNP) trading within just a few bucks of their own highs, it only makes sense that you'd find the guys who make train parts riding the rails right beside 'em.

But is the price right?

The bull case for Westinghouse Air Brake Technologies 

• Way back in 2006, CAPS All-Star xds68 had already taken a bead on Wabtec, calling the company an "inexpensive beneficiary of solid rail cap ex cycle."
• What exactly is a "rail cap ex cycle," you ask? The Fool's own TMFPhila (also a CAPS All-Star) filled us in in April: "Greater use of railroads in freight transportation: With high gas prices and a commodities boom, importers and exporters have been using the more fuel-efficient railways to transport goods across the continent. This has resulted in increased demand for locomotives, freight cars, and other related services that Wabtec provides. ... Growing demand for rail-based regional transit.... [T]hese factors have also prompted federal, state, and local governments to push for improved and more extensive light rail systems. All of this is great news for Wabtec."
• Summing it all up is our third All-Star commenter, reddingrunner, who opined last summer: "Better than buying a railroad, buy the company all the railroads buy from. Better than just great numbers, Wabtec has also invented a new braking system for trains and subways, the first real improvement since the 19th century! And it IS a big improvement if it lives up to it's hype. Even without the new brakes generating tons of orders, this would STILL be a good pick; with this new potential this could be a grand slam."

In fact, it has been a grand slam. Scroll down the list of 55 well-articulated comments in Wabtec's favor on the company's CAPS page, and you won't find a single "red" score -- literally everyone has made money on this one. But the real question is, if you follow their lead, will you?

Fools, much as I'd like to sound the "all aboard," I can't in good conscience do that. While the company's certainly fired up, the stock appears to be running on fumes. Wabtec currently sports a P/E ratio of 24, which seems a rich valuation for a company expected to grow at less than 14% long term. And while cash flows are strong, they're not strong enough to generate a meaningfully lower price-to-free cash flow ratio.

Simply put -- and forgive the obvious pun here -- this train has left the station. You're either on it already, or you've missed it.

Time to chime in
Of course, I've been wrong before. According to CAPS, I barely get three picks out of five right. If you think you can do better, come on over to Motley Fool CAPS and give us your take on Westinghouse Air Brake Technologies.

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