5 Stocks That Just Won't Quit

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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:

Stock	Recent Price	CAPS Rating (out of 5)	Bull Factor
Cerner (Nasdaq: CERN)	$66.87	****	93%
Seattle Genetics	$13.76	****	92%
Skyworks Solutions  (Nasdaq: SWKS)	$13.86	***	92%
Sybase	$36.85	***	87%
Aeropostale  (NYSE: ARO)	$42.69	**	86%

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

"Everybody loves a winner"
So they tell me, but to be honest, Fools, I'm not seeing a lot of love in the table up above. Judging from the ratings assigned by our CAPS members, most of these stocks merit just a shrug and a shuffle off to something better. (And for Aeropostale, not even the shrug.)

Who is that "better," though? Apparently, it's a little medical software shop by the name of ...

Cerner
As CAPS All-Star MagicTrader pointed out in April: "Here in the US we are way behind in using technology for administrational purposes within hospitals, doctor offices etc. With Obama supporting the going electronical initiative this stock (and its peers like [Quality Systems (Nasdaq: QSII)] and [Athenahealth] should advance within the next years."

But this isn't just a "great expectations" story. Cerner's got a pretty strong past as well. Fellow CAPS All-Star CubsBearsBulls43 tells us that:

Cerner has "performed very well in a difficult environment. IT health care spending was projected to be the biggest capex growth area for hospitals and large medical practices before Obama was elected. Now, if he holds to his word, it will be easier for hospitals to make these large-ticket long-term commitments. Cerner is a leader in this industry and should do very well despite this recession.

And maybe for quite a while after the recession ends. Yet another of our All-Star investors, bclan13, predicts: "Cerner will always be around. Many [health care information technology] companies will not."

Ah, but should you stick around and see how this situation plays out -- or cash out here at Cerner's five-year high? That's the real question.

Most analysts agree with our CAPS posters that Cerner's future looks bright. The consensus on Wall Street calls for about 17% five-year annualized growth out of the company -- not at all shabby. Yet whatever you think of its prospects, Cerner does look a mite pricey from up here atop a 28 P/E. Is that too much to pay for progress?

One word: Yes
Now don't get me wrong, Cerner is a fine shop. Its $200 million-plus in trailing profit is real, backed up almost entirely by its $191 million in trailing free cash flow. Cerner pulled down a robust 17.7% operating profit margin in the last four quarters, on par with or better than the leading lights of IT -- why, IBM (NYSE: IBM) itself pulls down only an 18.6% operating margin, and Accenture (NYSE: ACN) is stuck down in the 12's. Last but not least, Cerner's balance sheet is just clean as a whistle -- $148 million in debt being easily covered by the firm's $384 million cash stash.

But as much as Cerner has going for it, the fact remains that 17% growth doesn't really justify a 28 P/E stock. Not with so many other companies trying to horn in on Cerner's business. Not with so many questions about the future of health care reform still up in the air.

Foolish takeaway
Cerner shareholders have had a great run, but all good things come to an end. Perhaps now's the time to take a bow, pull the chips off the table, and count your winnings. Hey, it's not so bad. There are worse ways an investment could play out.

(Disagree? Feel free. Dissent isn't just welcomed, it's encouraged here at the Fool. If you've got a better read on where health care is heading -- or a better theory on how much Cerner will profit from it, we'd love to hear your thoughts. Click on over to Motley Fool CAPS, and tell me why I'm wrong.)