5 All-Star Stocks on Fire

The clock's ticking down, your team's down 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 who do you dish the rock to?

Your first thought might be the resident superstar -- the 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 when they make investments. They want to give the nod to the stocks that are hot to the touch.

But momentum by itself will only get you so far. What sounds more interesting to me than simply looking for stocks that have momentum is finding high-quality stocks that also have some positive inertia on their side. It's like kicking the ball out to Michael Jordan or Larry Bird when they do 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 companies below is up 30% or more over the past year, is within 5% of its 52-week high, and has been rated highly by CAPS players.

Stock

12-Month Change

Percent Below 52-Week High

CAPS Rating (out of 5)

InterContinental Exchange (NYSE: ICE  )

78%

2.3%

****

McDonald's (NYSE: MCD  )

44%

2.2%

****

Aspreva Pharmaceuticals (Nasdaq: ASPV  )

43%

1.6%

*****

Unilever (NYSE: UL  )

42%

1.3%

*****

Amedisys (Nasdaq: AMED  )

38%

4.9%

*****

Sources: Yahoo! Finance, Capital IQ, and CAPS as of Nov. 19.

At first glance, this sure looks like a high-quality group. But, as always, I highly advise taking a closer look before you throw a bounce pass in the direction of any of these stocks.

Finding the bright spots
With the market hitting the skids in a bad way over the past few weeks, it hasn't been easy for investors to find any bright spots. Many of the stocks hitting new 52-week highs are doing so thanks to buyout offers. Last week, I highlighted NAVTEQ (NYSE: NVT  ) , and this week we've got Aspreva, which has agreed to be picked up by Galenica Group.

Thankfully, there are some areas where investors are finding success sans buyouts. Not surprisingly, one of those areas is safe, defensive stocks. As many investors are hunkering down for a potential prolonged slowdown, stocks like Unilever and McDonald's are seeing some nice upticks.

Energy continues to be strong as well, and while you can certainly hit up the oil players like Exxon Mobil (NYSE: XOM  ) , InterContinental Exchange has been ringing the register from another angle. As my fellow Fool Tom Taulli discussed at the end of October, InterContinental -- which operates an exchange for commodities futures and derivatives -- has been profiting from the high commodities that have been squeezing companies in many other industries.

So does InterContinental deserve a place on your All-Star team? You can share your thoughts on the company -- or check out more of what your fellow Fools had to say about it, or any of the other stocks above -- by stopping by CAPS. And while you're there, you can also take a peek at few more of the 5,000 other rated stocks.

I think I heard a "booyah" somewhere out there - thanks, Stuart Scott!

More CAPS Foolishness:


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