5 Stocks That Just Won't Quit

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In my weekly Fool column "Get Ready for the Fall," I run Nasdaq.com's 52-week highs list through the "wisdom of crowds" meter we call Motley Fool CAPS. The result: a list of stocks that have flown so high, investors are starting to get nervous about that whole "gravity" thing. But while many stocks will indeed plunge back to Earth, some seem immune to gravity, steadily riding a rising megatrend to ever-greater heights.

Today, we'll move beyond stocks that have hit 52-week highs, and identify companies now surpassing five solid years of outperformance. Which of these will thrash the market averages for another half-decade? Here are this week's leading contenders:

Stock	Recent Price	CAPS Rating (out of five)	Bull Factor
Orthovita (Nasdaq: VITA)	$6.53	*****	95%
Check Point Software  (Nasdaq: CHKP)	$26.69	****	94%
Fuqi International (Nasdaq: FUQI)	$24.13	***	93%
Perfect World	$35.75	***	92%
Green Mountain Coffee  (Nasdaq: GMCR)	$70.44	*	66%

Companies are selected from the "New 5-Year Highs" list published on MSN Money on Friday. CAPS ratings from Motley Fool CAPS.

"Everybody loves a winner"
Well, maybe not literally everybody ... or loves ... but it's at least true that a lot of people have a strong affinity for these stocks. With the exception of Green Mountain, each of these stocks can look down from the summit of its own five-year high and find 90% approval ratings or greater among the investors who've rated them on CAPS.

And one stock in particular they out-and-out love: Orthovita. Let's find out why.

The bull case for Orthovita
Orthovita gets especially high marks from some of the best investors we track on CAPS. CAPS "All-Star" TSIF tells us that:

Orthovita has been in the 'bone surgery' business for several years ... Although it's also coming off of a losing quarter, and has spent the last three years near break-even, I very much like what I see. FDA approval of CORTOSS, an injectable bone replacement composite was just achieved. I don't know what the market potential is of Cortoss, but ... according to Orthovita ... Cortoss is easier to use, more effective, and will be preferred by surgeons in the delicate Spine/fracture/compression operations that is its initial target.

Fellow All-Star PhillyDan believes that thanks to "aging baby boomers, Orthovita's unique medical implant devices will become more of a fixture to repair bone fractures for bone compression injuries. In addition, their Vitagel and Vitasure products will be employed widely in surgeries to help stop bleeding and increase healing time."

One of the great things about CAPS is that, with 135,000 (and growing) investors writing here, we're bound to come across a few having first-hand experience with the companies they recommend. One such investor, bonedude6, confided to us late last year that: "I worked for a company that distributed Orthovita products and I saw first hand what Vitoss could do and the amount of bone regeneration that took place in the spine following surgeries. Vitoss is a great product and I'm counting on Cortoss to be just as good and used by even more surgeons."

High praise indeed. So it sounds like Orthovita has a winning product on its hands -- but what about the company behind the Cortoss? What do Orthovita's numbers look like?

Sadly, that's where this story breaks down. Great as its products may be, Orthovita itself has some truly frightening numbers behind it. As TSIF suggested, the company is not profitable, in its most recent quarter or the past four quarters. Its balance sheet is weak, carrying more debt than cash.

And speaking of cash, Orthovita has burned through $16.5 million over the past 12 months -- and has in fact not generated positive free cash flow since at least as far back as 1997.

Now, maybe Cortoss is the kind of wonder drug that can heal Orthovita's balance sheet and income statement alike. I'm not a doctor; just an investor -- I simply do not know. But from where I sit, I do see significant risk of shareholder dilution. Unless Cortoss becomes an immediate and smashing success, the continued cash burn could require Orthovita to either take on additional debt, or raise cash through a follow-on offering within a year or two in order to remain solvent.

Foolish takeaway
Does that mean you should not buy Orthovita? Not necessarily. For one thing, Orthovita's own weak position may open the door to an acquisition by a stronger player in the field -- Johnson & Johnson (NYSE: JNJ), Medtronic (NYSE: MDT), and Stryker (NYSE: SYK). Moreover, if you believe the new drug's prospects are sufficiently good that you can afford to endure a little share dilution en route to riches -- more power to you. Orthovita just might pull through on its own. All I'm saying is that you should go into this situation with eyes wide open.

Time to chime in
And now's the time in this column when you get to respond. So tell us -- do Orthovita's numbers leave you unenthused? Or do the new drug's prospects outweigh your concern? Click on over to Motley Fool CAPS now, and tell us what you think.