When the clock's ticking down and the game's on the line, which of your teammates do you trust to sink a winning shot? Sure, you could dish the rock to your resident superstar -- but what if he's playing ice-cold at the moment? So instead, you pass to the guy with the hot hand, the one who'll be deemed en fuego tomorrow on ESPN.
Momentum investors are looking for stocks in a similar state of sizzle. But momentum by itself will only get you so far. I prefer to find high-quality stocks that also have some positive inertia on their side. It's like kicking the ball out to your team's superstars when they do have a hot hand.
To find these league-leading winners, I cross-referenced a simple momentum screen with data from The Motley Fool's CAPS investing community. Each of the companies below is up 30% or more over the past year, now trades within 5% of its 52-week high, and has been rated highly by CAPS players.
|
Stock
|
12-Month Change
|
% Below 52-Week High
|
CAPS Rating
|
|
Cal-Maine Foods (Nasdaq: CALM)
|
218.3%
|
0%
|
****
|
|
NetEase.com (Nasdaq: NTES)
|
69%
|
4.5%
|
*****
|
|
ViroPharma (Nasdaq: VPHM)
|
53.6%
|
1.6%
|
*****
|
|
National Presto Industries
|
46.4%
|
0.9%
|
*****
|
|
Genzyme (Nasdaq: GENZ)
|
37.1%
|
2%
|
****
|
Sources: Yahoo! Finance, CapitalIQ, and CAPS as of Aug. 18.
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 toward any of these stocks.
It's all fun and games
If the acronym MMORPG is just a jumble of letters to you, then you're probably not a gamer. MMORPG stands for "massively multiplayer online role-playing games," and in China, those six letters are big business. Rule Breakers pick NetEase is one of the leaders of the industry, with a total equity value of $3 billion. It's joined by handful of competitors, such as fellow Rule Breaker Shanda Interactive (Nasdaq: SNDA), Giant Interactive (NYSE: GA), and The9.
So what's putting the spring in NetEase's step? Take your pick. The 28% year-over-year revenue growth in its most recent quarter is pretty attractive. The 40% profit growth is even more so. You may also take a fancy to the company's balance sheet, which contains a ludicrous amount of cash.
But perhaps most important of all, NetEase's business just got a major shot in the arm from Activision Blizzard (Nasdaq: ATVI), which said that it's going with NetEase to put two of its monster series -- Warcraft and Starcraft -- online in China. Though The9 has an existing relationship with Blizzard in China for the World of Warcraft game, this agreement should be huge for NetEase -- not to mention a big disappointment for The9.
CAPS member Syko21 thinks that the Blizzard agreement makes this stock an easy choice. He recently became one of the 878 CAPS members who are bullish on NetEase and simply said: "Getting the Blizzard deal was huge. Buy them now."
Fielding your team
So do you think any (or all!) of these companies deserve a place on your All-Star team? You can share your thoughts on NetEase, 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 5,500-plus other stocks that are rated on CAPS.
I think I heard a boo-yah somewhere out there -- thanks, Stuart Scott!
More CAPS Foolishness:
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