5 All-Star Stocks Fighting the Tide

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 will 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.

There's no doubt that now's a tough time to try and find winners out there, but to find the current league leaders, I ran a simple momentum screen on The Motley Fool's CAPS screener. Each of the stocks below was showing positive returns over the past four weeks -- despite the S&P's double-digit loss -- and has been rated highly by CAPS players.

Stock

4-Week Change

12-Month Change

CAPS Rating (out of 5)

Shanda Interactive (Nasdaq: SNDA  )

5.3%

(7.0%)

****

Teva Pharmaceutical (Nasdaq: TEVA  )

4.3%

(11.4%)

*****

Yamana Gold (NYSE: AUY  )

2.9%

(56.4%)

****

GameStop (NYSE: GME  )

2.5%

(38.4%)

****

Honda Motor (NYSE: HMC  )

0.5%

(25.4%)

****

Sources: Yahoo! Finance, Capital IQ, and CAPS as of March 2.

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. In fact, I'll even kick off your research with a look at Honda Motor.

Providing the pep
In a rapidly declining market, it takes a bit of pep just to tread water, and that's exactly what Honda has been doing over the past month. And it managed to do it while industry news was dominated by concerns over the viability of General Motors (NYSE: GM  ) , Ford (NYSE: F  ) , and Chrysler.

It's not that Honda's news has been all that good. Over the past month, the company announced that January sales fell 30% from the prior year, and it replaced its CEO. Despite the rocky news, though, Honda is still in far better shape than the U.S. automakers and has a balance sheet that won't imperil the company even as auto sales slump. So while investors can expect that it'll be an uphill slog for a while, at least they don't have to count on the goodwill of Uncle Sam to keep the lights on.

The call from CAPS
Though Honda hasn't quite hit five-star status on CAPS, the stock has more than 1,500 outperform ratings versus 92 underperforms. More than a year ago, CAPS All-Star kristm called Honda "The Apple of auto manufacturers" and predicted that the company "Will continue to grow as American auto manufacturers drown in their own stupidity." Meanwhile, TMFEldrehad, who's been bullish on Honda for even longer, pitched:

Honda largely steered clear of the bigger, heavier, V-8 engine SUV craze, and is beginning to see the benefits of that decision. Honda is also making a foray into the ultra-light jet market, and given the company's history of innovations (it actually beat Toyota to market with a hybrid car, the Insight), I'm liking its chances.

The stock has beaten the market for both of these members so far, and the rationale for sticking with Honda seems very intact. Its cars continue to be among the most dependable and most efficient -- particularly its category-leading Civic. And while the U.S. government seems dead-set on saving the U.S. automakers no matter what the cost, the uncertainty around the future of these manufacturers could push some customers in the direction of Honda.

Earnings have been compressed thanks to the fall in sales, but Honda's valuation looks pretty attractive on the basis of both sales and book value. In short, it looks like Honda's stock is well-positioned to continue outperforming the rest of the market.

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 them, or check out more of what your fellow Fools had to say, by stopping by CAPS. And while you're there, you can also take a peek at a few more of the 5,300-plus other stocks that are rated on CAPS.

More CAPS Foolishness:

Shanda Interactive Entertainment is a Motley Fool Rule Breakers recommendation. GameStop and Apple are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days.

When it comes to basketball, Fool contributor Matt Koppenheffer might be the guy Ron Shelton had in mind when he thought of 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'' vertical jump and can dunk from half court. Or so I hear.


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