5 All-Star Stocks on Fire

The clock's ticking down, your team's down by one, you're being double-teamed, and you wouldn't have enough time to get off a good shot even if you were allowed to drop-kick both defenders. So whom do you dish the rock to?

Your first thought might be the resident superstar -- your resident Kobe Bryant or LeBron James. But what if Kobe, as good as Kobe is, is playing colder than an Alaskan snowdrift? That's right -- you dish to the guy with the hot hand, the guy who will be deemed en fuego tomorrow on ESPN.

Momentum investors are looking for stocks in a similar state of sizzle. They want to give the nod to the stocks that are hot to the touch.

But momentum by itself will get you only so far. What sounds more interesting to me is finding high-quality stocks that also have some positive inertia on their side. It's like getting the ball out to Michael Jordan or Larry Bird when he does have a hot hand.

To find these high-quality winners, I cross-referenced a pretty simple momentum screen with data from The Motley Fool's new investing community, CAPS. The result is a starting lineup of all-star stocks that all currently have a fiery shooting hand. Each of the stocks below has risen 30% or more over the past year, is within 5% of its 52-week high, and has been rated highly among CAPS players.

Stock

12-Month Change

Percent Below 52-Week High

CAPS Rating (Out of 5)

Diana Shipping (NYSE: DSX  )

206%

0.7%

*****

Vimpel Communications (NYSE: VIP  )

168%

0.2%

*****

Suntech Power Holdings (NYSE: STP  )

134%

0%

*****

AFLAC (NYSE: AFL  )

38%

0.5%

****

CVS Caremark (NYSE: CVS  )

34%

0.4%

****

Sources: Yahoo! Finance and CAPS as of Oct. 29.

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.

A place in the sun
This week's selection brings us two tried-and-true U.S. stocks -- AFLAC and CVS -- which are no doubt benefiting from some of the concerns that investors have in the housing, finance, and retail sectors within our borders. Avoiding the struggling areas in the U.S. are the other three stocks, which are all overseas companies that are benefiting from global growth.

One of those foreign companies, Rule Breakers pick Suntech Power, comes to us from the same group of solar stocks that brought SunPower's (Nasdaq: SPWR  ) former parent, Cypress, to the forefront last week. Suntech's stock has been riding some of the same tailwinds as the rest of the solar industry, while oil keeps climbing to new highs. On Monday, when oil futures hit $94, the stock was able to fight off a downgrade by Brean Murray and rise nearly 13%. Last week, the stock had an even bigger 16% day, when it announced a $1.5 billion contract with Asia Silicon to give Suntech access to high-purity polysilicon.

Even many of the CAPS All-Stars, not all of whom have been gung-ho about China and solar power, have gone positive on Suntech. One of them, 12bagger, notes that "the Chinese are going to need a LOT of solar generation capacity to make a dent in their huge future demand for hydrocarbons." He also suggests that MEMC Electronic Materials (NYSE: WFR  ) , which produces silicon wafers for semiconductor and solar industries, could be a good "[complementary] investment idea."

So does Suntech deserve a place on your All-Star team? You can share your thoughts on it, see more of what your fellow Fools had to say about it, or discover opinions on more than 5,000 other rated stocks by stopping in at CAPS.

I think I heard a boo-yah somewhere out there -- thanks, Stuart Scott!

More CAPS Foolishness:


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