5 Hot Stocks You're Buying Now

Double-down on hot stocks? After the Great Wall Street Panic of 2008, who would dare?

Of the 103 stocks that our data source Capital IQ says doubled in 2007, 75 dropped at least 40% in 2008, including First Solar (Nasdaq: FSLR  ) . But not all stock pickers suffered: Capital IQ also found eight stocks that posted positive gains after doubling in 2007. One, Sequenom (Nasdaq: SQNM  ) , doubled again.

Wowsa.

Ride this elevator
In better years, the ratio would be a lot higher. Consider 2003, in which the S&P 500 rose more than 26%. Capital IQ found 301 stocks that doubled that year, 183 of which beat the market again in 2004.

In other words, hot stocks can be worth buying. Fool co-founder David Gardner, chief rebel for our Motley Fool Rule Breakers service, often buys stocks after they've become multibaggers. "I bought AOL after it quadrupled," he declared in describing the six signs of a rebel stock in the making. As an investor, I'm constantly hunting for superior growth stocks that will transform my portfolio and secure my family's fortunes. Care to join the quest? Our 125,000-member Motley Fool CAPS database can help.

Each of these five stocks is poised to grow net income by at least 15% a year over the next five, earns no less than three stars from our CAPS community, and have risen 20% or more over the past 52 weeks:

Company

CAPS Rating
(5 stars max.)

5-Year Growth
Estimate

52-Week
Performance

Compass Minerals (NYSE: CMP  )

****

38.0%

51.3%

American Science & Eng. (Nasdaq: ASEI  )

****

15.0%

47.8%

Synaptics (Nasdaq: SYNA  )

****

19.8%

30.1%

Myriad Genetics (Nasdaq: MYGN  )

***

25.0%

97.0%

NetScout Systems (Nasdaq: NTCT  )

***

17.0%

53.2%

Sources: Motley Fool CAPS, Yahoo! Finance.

A touch of Synaptics
If CAPS investors love Synaptics it's because of the netbook craze. Explained robert815 in this late January pitch:

[Synaptics] consistently outperforms the market and beats expectations. They are good amount cash on hand and bought back shares. They are riding the wave of touchscreen craze after the iPhone. They are in the Blackberry Storm and Google G1 Android phones. They are also the dominant market leader in supplying notebook touchpads, and will benefit from the increased popularity of netbooks around the world. I expect continued success as long as these trends continue.

Touchscreens are, indeed, powerful technology. But it isn't new technology. 3M invented touch-sensitive dispersive signal technology (DST) in 2002. Can Synaptics maintain momentum in a maturing market? Last month's earnings report -- in which revenue and profit both surged by more than 40% -- screams, "YES!"

Plus, this rebel, with a PEG ratio of 0.62, is priced well below its expected long-term growth estimates. That's more than enough of a margin for CAPS investor samm107.

"Synaptics is a very innovative company creating chips and sensors for electronics including PDAs, cell phones, and currently most research geared toward laptops and notebooks. I personally love the new enhanced gesture recognition and the smart touch capability," our Fool wrote in a June pitch.

And you? Would you buy Synaptics at current prices? Let us know by signing up for CAPS today. It's 100% free to participate.

See you back here next week with five more hot stocks you're buying now. Fool on!

Fool contributor Tim Beyers, is slowly recovering his CAPS rating. He had stock and options positions in Google at the time of publication. Google and American Science and Engineering are Rule Breakers recommendations. 3M is an Inside Value pick.

Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. Tim seeks the best growth stocks as a member of the Motley Fool Rule Breakers team. The Motley Fool is also on Twitter as @TheMotleyFool. Its disclosure policy overcame its growing pains years ago.


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  • Report this Comment On February 05, 2009, at 6:32 PM, itainvestor wrote:

    I told you so. First time I bought was in 2002 @12.50, then november 2002 @4.5 (when insider buying at the time CEO Federico Faggin). Then again in 2004 @13.50 and april 2005 @18.50. And I mean prices are pre-split 3:2. Fools, THIS is long term investing! I've always been happy at never seeing SYNA among Fools recs! But I always read Tim Beyers' articles. Fool on... (or fool on?). Goodbye!

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