5 All-Star Stocks on Fire

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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 star -- 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 stars 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 members.


12-Month Change

Percent Below 52-Week High

CAPS Rating

Masimo (Nasdaq: MASI  )




Luminex (Nasdaq: LMNX  )




ATS Medical




PhiladelphiaConsolidated Holdings   (Nasdaq: PHLY  )








Sources: Yahoo! Finance; Capital IQ, a division of Standard & Poor's; and CAPS, as of Sept. 8.

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.

One way to the top
Finding stocks hitting new highs is a tough job right now, and what's worse, many of the stocks that are peaking are only there because they're being taken off the market. Coming all the way from Japan, Tokio Marine Holdings is taking over Philadelphia Consolidated. Barr Pharmaceuticals (NYSE: BRL  ) -- not on this list, but also near its peak -- is slated to merge with Teva Pharmaceutical (Nasdaq: TEVA  ) . UST, same deal. And let's not forget about Anheuser-Busch (NYSE: BUD  ) and its marriage with Belgian company InBev.

But not all the hot stocks are gaining on deal news.

The safe haven of medical devices
Regardless of the Fannie Mae and Freddie Mac (NYSE: FRE  ) bailout, financials and homebuilder stocks remain "buyer beware." Retail and restaurant stocks are dependent on increasingly vulnerable consumer spending. Commodities, which had been the place to be, have fallen sharply and are still on bubble watch.

ATS Medical, Masimo, and Luminex, however, know that even as everything else slows down, spending on medicine and medical devices continues. Take Masimo, which makes equipment that monitors the oxygenation of arterial blood. When oxygen levels in the blood get too far out of whack, nasty things like brain damage and death usually aren't far behind. As a result, even with a massive decline in housing prices, the spending on such life-saving devices isn't slowing down.

In fact, when Masimo came out with second-quarter results back in early August, it reported product revenue growth of 30% and boosted its full year per-share profit guidance by 23%. This stellar performance has earned the stock a five-star rating on CAPS, with 125 out of 131 members rating it calling it an outperformer. One of these bulls, momlehane, gave Masimo the thumbs-up back in March, noting not only the company's current products, but also the work it has been doing on carbon-monoxide monitoring equipment:

Massimo blood gas analyzers do something that the competition does not - it works with existing equipment AND it can function by itself as a new purchase. The strides that Masi has made in monitoring CO in the blood for Emergency Techs to use in the field has an incredible edge in initiating appropriate care in a timely manner.

Fielding your team
So do you think any (or all) of these companies 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 5,500-plus other stocks that are rated on CAPS.

I think I heard a boo-yah somewhere out there -- thanks, Stuart Scott!

More CAPS Foolishness:

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-inch vertical jump and can dunk from half-court. Or so I hear.

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10/27/2016 4:00 PM
LMNX $20.47 Down -0.27 -1.30%
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PHLY $61.45 Down +0.00 +0.00%
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