3 Stocks Ready to Roar

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There are plenty of strategies for picking stock winners: low P/E stocks, companies selling at a discount to their future cash flows, and more. At the small-cap-stock service Motley Fool Hidden Gems, the analysts are able to stay ahead of the game even in this market by finding undervalued stocks that the market and investors have ignored.

Yet what if we could find a way to whittle down our list of prospects beforehand, finding those stocks whose engines are just getting warmed up?

Using the Motley Fool CAPS investor intelligence database, I screened for stocks that had been marked up by investors before their prices began to move up over the past three months while the market was headed south in a dramatic fashion. My screen returned 78 stocks when I ran it and included these recent winners:

Stock	CAPS Rating Oct. 7, 2008	CAPS Rating Jan. 7, 2009	Trailing 13-week Performance
AK Steel (NYSE: AKS)	**	***	9.3%
JDS Uniphase (Nasdaq: JDSU)	**	***	12.1%
Ligand Pharmaceuticals (Nasdaq: LGND)	**	***	23%

Source: Motley Fool CAPS screener; trailing performance from Jan. 16 to April 14.

AK Steel, in fact, was picked as a stock ready to run back in January and has lived up to that promise so far. And while this screen might tell us which stocks we should have looked at three months ago, what we want are the stocks that we ought to be looking at today. I went back to the screener and looked for stocks that had just been bumped up to three stars or better, sport valuations lower than the market's average, and whose price hasn't moved up over the past month by more than 10%.

Here are three stocks out of the 28 the screen returned that are still attractively priced; some investors think they are ready to run today.

Stock	CAPS Rating Jan. 14, 2009	CAPS Rating April 14, 2009	Trailing 4-Week Performance	P/E Ratio
Alliant Energy (NYSE: LNT)	**	***	3.8%	9.2
Hewitt Associates (NYSE: HEW)	**	****	3.4%	14.9
S1 (Nasdaq: SONE)	**	****	0%	13.9

Source: Motley Fool CAPS Screener; price return from March 20 to April 14.

The results you get may be different because the data is dynamically updated in real time, but you can run your own version of this screen. Now let's take a look at why investors might think these companies will beat the market.

Alliant Energy
Regional utility Alliant Energy says the economic and political climate for coal-fired plants doesn't make it feasible to move forward with such new power plants, but wind energy still remains a viable option. It bought a wind farm in Minnesota that it plans to start up in 2010. CAPS member Caryaman wrote earlier this year that the company would make an attractive investment. "Solid company that will benefit from energy policy to stimulate economy."

Hewitt Associates
As companies look for ways to save money, they might consider outsourcing human resources tasks. CAPS member Schups finds the idea has merit: "HR outsourcing could be a good way to compact costs in crisis time, I think."

S1
All-Star CAPS member MJKpayday believes financial services provider S1 is taking it on the chin because of guilt by association with large banks like Citigroup (NYSE: C). 

A small well managed financial services company serving the role of a baby being thrown out with the tide of "big bad bank" bath water.

Three for free
It pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Why not head over to the completely free service and let us hear what you've got to say about these or any other stocks that you think are starting to rev their engines?