3 Stocks Ready to Roar

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

But what if we could whittle down our list of prospects beforehand, to find those whose engines are just getting warmed up?

Using our investor intelligence database at Motley Fool CAPS, I screened for stocks that were marked up by investors before their share prices rose over the past three months. (The market as a whole climbed sharply, then traded sideways, during that same period.) My screen returned 121 stocks when I ran it, no doubt reflecting the market's continued recovery, and included these recent winners:

Source: Motley Fool CAPS Screener; trailing performance from July 24 to Oct. 19.

Alamo Group, in fact, was previously picked as a stock ready to run in June. But while this screen might tell us which stocks we should have looked at three months ago, we'd rather find the stocks that we ought to be looking at today. I went back to the screener and looked for stocks that were just bumped up to three stars or better, sport valuations lower than the market's average, and haven't appreciated by more than 10% in the past month.

Of the 41 stocks the screen returned, here are three that are still attractively priced, but which investors think are ready to run today:

Source: Motley Fool CAPS Screener; price return from Sept. 25 to Oct. 19.

You can run your own version of this screen; just remember that the data's dynamically updated in real time, so your results may vary.

Let's examine why investors might think these companies will go on to beat the market.

Best Buy
Even if eclectic electronics retailer Radio Shack (NYSE:RSH) did manage to beat analyst expectations this quarter, that doesn't mean it's still much of a serious contender for the giant electronics retailer. In addition, CAPS member MMcCabeNMC says Best Buy benefits from Circuit City's demise: "There isn't much competition for Best Buy these days. Assuming that brick and mortar don't die completely, Best Buy rules the category."

Research In Motion
CAPS member Rihanna thinks the next earnings report out from Research In Motion will finally make it the next monster stock:

should get some action right around 3rd quarter earnings, December 17th, their earnings have been steadily increasing throughout the years. their 3rd quarter earnings will spike this stock higher, might underpreform short term as the markets are getting choppy once again, but its approaching a floor price. Its a good fundamental play.

Critics of the BlackBerry have tried to pigeonhole it as a stuffy work-centric gadget; expect a new branding effort by Research In Motion to help shed that image. A more appealing profile just might be the thing to help the BlackBerry rise above the crowded smartphone field.

Verso Paper
A variety of virtues at Verso Paper attract Deanhan1 to the catalog and magazine paper supplier:

Excellent and smart Management team. Much leaner company. Developed variety of products.6 to 12 dollar stock- one year from now. Reducing debt. Sales are increasing.

Yet this would seem to be something of a contrarian play. According to Publishers Information Bureau, ad pages have been dropping at magazines at an alarming rate, down 27% in the third quarter alone. Forbes is laying off staff in response to the decline in advertising revenue, and Conde Nast's Portfolio recreated itself as an online-only publication after closing earlier this year.

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 CAPS 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.