These High-Flying Stocks Are Just Getting Started

Good news, everyone! Ben Bernanke is dropping hints again! That's given the markets the kick in the pants needed to start the week strong. We're now solidly in positive territory for the past year, with little on the immediate horizon threatening to undo the market's gains. Plenty of companies have seen their share prices soar, but some are floating on more hope than reality. There are still buying opportunities in this high-flying crowd, though, if you know where to look. Let's take a look at some of them today to find out why their great runs might continue.

Light the fuse
The Dow's up by about 8% over the past year, but I wanted to find some stocks that have grown a fair bit more. To make it reasonable, I looked for good long-term earnings growth and a fairly low P/E. These three companies all have solid reasons to outperform for at least a year:

Source: Finviz.com and Yahoo! Finance. *Next year's projected growth only.

Tickets to the gun show
Sturm Ruger and its rival gunmaker Smith & Wesson (Nasdaq: SWHC) are both up big on the year with record gun sales. Nearly 130,000 background checks were processed on Black Friday last year, a 32% increase over a record set in 2008. Sturm has a much more reasonable current P/E than Smith & Wesson's 119, but Smith & Wesson's forward P/E of 19.7 comes close to Sturm's. Sturm does have the enviable position of having so many orders that it was forced to stop accepting new ones, which all but guarantees a great year.

Much of that optimism may now be baked into the stock's current price, but I think there's enough upward momentum to keep this stock growing -- at least until the Mayan apocalypse comes. I think both stocks can keep growing until that happens, so I'll be holding my earlier outperform CAPScall steady for Sturm Ruger and adding an outperform call for Smith & Wesson until the end of the year.

ZAGG where others zig
The protect-and-accessorize company has not had many advocates here at the Fool, despite its continued growth. It's been called "wildly expensive", has earned a lowly one-star CAPS rating, and was dubbed a "faker breaker," the dreaded Foolish kiss of death to high-flyers. But the important numbers show a company that just keeps growing right along with its stock price:

ZAGG Total Return Price Chart by YCharts

Net income is growing at a faster rate than revenue, and the company has the highest anticipated growth over the next few years. Inventory growth is frequently mentioned as a downside risk, but providing options for hundreds of different mobile devices is no mean feat. With a strong distribution network and some excellent options for Apple (Nasdaq: AAPL) products, including attachable keyboards, extra battery packs, and high-quality audio solutions for the newest iPad, ZAGG has many ways to profit from the proliferation of popular devices.

Since Apple typically makes subtle changes to the case design of each new device generation, ZAGG's complementary business sees great benefits from a short product cycle. Its forward P/E is also lower than Apple's. I think this stock can keep outperforming for at least a year, and as ZAGG continues to diversify, it could keep pushing that timeframe further back.

Chips ahoy!
For a long time it seemed like Intel might be stuck in neutral. But the past year has buoyed the tech titan somewhat; it's hard to say that it's even started its growth phase, given its tiny P/E and industry-leading projected growth rate. PCs and servers are indisputably Intel's domain, and the company's had plenty of experience breaking into new (read: mobile device) markets before. That's the company's final frontier, and it will be a tough nut to crack, but it's hard to dismiss Intel's technological and financial edge over nearly all other chipmakers.

And then there's that dividend, one of the best in the entire computer hardware industry. Intel might not beat the market by much, but reinvested dividends and great long-term ambitions make it hard to bet against. Just watch out for dumb diversification, which might undermine my thesis.

Foolish final thoughts
I've made outperform calls on these three companies in The Motley Fool's CAPS to track the success of my predictions over the coming years. Sturm Ruger will be tracked for a year, and ZAGG for up to two, while Intel is a long-long-term play. If you're looking for another great buying opportunity in another high-flying stock, The Motley Fool has picked out a company we feel will be the top stock for 2012. You can find out everything you need to know in our brand-new free report, but it'll only be available for a limited time. Get your free information now before you miss your chance at big gains.