Hot Stocks You're Buying Now

Welcome back to another Foolish review of the hottest stocks on Motley Fool CAPS. We're looking at the three best-performing industries over the past 30 days, and your favorite long and short candidates in each.

Last time, multimedia-software makers were all fired up. They've since hit the showers and made room for -- wait for it -- residential construction firms, which, as a group, have risen 39.59% over the past 30 days.

Surprised? There's more. Having erected a 30.30% average return since mid-January, MDC Holdings (NYSE: MDC  ) and its homebuilding peers aren't too far behind the bigger builders.

To me, though, the real surprise is third place. Car-parts stores such as Pep Boys (NYSE: PBY  ) , which have suffered in recent years, have climbed 20.2% over the past month.

According to you, our Foolish readers, the best stocks in these industries to own now -- i.e., those with at least four of the maximum five stars in CAPS -- are:

Company

CAPS Stars

No. of CAPS Ratings

Bull Ratio

30-Day Price Change

O'Reilly Automotive (NASDAQ:ORLY)

*****

115

99.1%

16.9%

Homex Development (NYSE:HXM)

*****

223

95.9%

11.4%

Sources: Motley Fool CAPS, Yahoo! Finance.

And your favorite short candidates -- i.e., those carrying a rating of one or two stars in CAPS -- are:

Company

CAPS Stars

No. of CAPS Ratings

Bear Ratio

30-Day Price Change

M/I Homes (NYSE:MHO)

*

240

81.3%

85.3%

WCI Communities (NYSE:WCI)

*

469

78%

145.8%

Beazer Homes (NYSE:BZH)

*

861

76.4%

34.4%

Sources: Motley Fool CAPS, Yahoo! Finance.

O'Reilly Automotive intrigues me because of its remarkably stable margins and double-digit returns on capital in a turbulent industry. CSK, in contrast, has seen steady declines in both categories since fiscal 2004 (which ended 1/30/05). Perhaps that's why CSK is finally thinking about selling out to its better-managed peer?

I find O'Reilly, at 16 times 2008 earnings, reasonably priced. Some investors find that multiple cheap.Here's how CAPS All-Star capsoregime put it in November:

Their earworm of a commercial has me inadvertently wanting to call O'Reilly whenever I need car parts, even though we're close friends with a NAPA dealer here in town. They've really come from a nobody in this area to having a seemingly booming business. One area isn't going to make or break a stock, but if their expansion plays at as well in every market they enter, they should have some market beating numbers. I don't mind picking it up near it's 52 week low, either.

Other Fools agree. Six of the seven CAPS players who have rated O'Reilly in 2008 believe it will outperform the broader market. And three of those are among the best of the best investors in CAPS. I see no reason to veer from their superior judgment.

But that's my take. What's yours? Would you buy O'Reilly Automotive at today's prices? Let us know what you think by signing up for CAPS today. It's 100% free to participate.

Cap off your day with related CAPS Foolishness:


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