5 All-Star Stocks on Fire

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 getting 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 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 a high rating among CAPS players.

Stock

12 Month Change

CAPS Rating (Out of 5)

Chemical & Mining Co. of Chile (NYSE: SQM  )

96%

*****

Freeport-McMoRan (NYSE: FCX  )

75%

*****

Chesapeake Energy (NYSE: CHK  )

67%

*****

Sasol (NYSE: SSL  )

67%

*****

Williams (NYSE: WMB  )

35%

****

Sources: Yahoo! Finance, Capital IQ (a division of Standard & Poor's), and CAPS as of May 19.

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

Natural-resource notables
Natural resources are hot in 2008, and the starting five above provide a good cross-section of the action.

The small guard on this team is the Chemical & Mining Company of Chile (SQM), the world's largest producer of potassium nitrate, iodine, and lithium carbonate. This South American magnate has benefitted from the worldwide agricultural boom as demand has increased for the fertilizer products that it produces from nitrate compounds. Joining SQM in the back court is the larger but still agile Williams, a natural-gas company with a keen focus on economic value added as a measure of success. The company had a solid 2007, and its CEO recently told its shareholders he's expecting big things in 2008.

In the front court, we have two solid forwards in natural-gas producer Chesapeake and South African oil and gas giant Sasol. Both companies are riding a great tailwind, with the global market for fossil fuels continuing to look stronger than Hulk Hogan in the Hulkamania days. Though Sasol isn't a household name, this Global Gains favorite is a company to watch as it cashes in on its ability to turn coal into liquid fuels.

And finally, holding center court on this all-star team is metals monster Freeport-McMoRan. This $50 billion miner is one of the world's largest when it comes to copper, gold, and molybdenum -- an element often used in high-strength steel alloys. As global growth forges ahead, investors continue to be excited about miners with capabilities like Freeport's. As a result, this stock has landed more than 3,500 outperform ratings on CAPS, versus a measly 86 underperform ratings. CAPS All-Star bucklebuck recently weighed in bullishly on Freeport and noted:

There are [two] big reasons why Freeport stands out. Its copper industry is well-known. But it is also a key miner of Molybdenum, an element used in steel production. If you haven't realized by now that there is a serious steel bull market, you aren't doing your homework.

So do you think any of these companies deserve a place on your all-star team? You can share your thoughts, or check out more of what your fellow Fools had to say, by stopping in at CAPS. And while you're there, you can also take a peek at the 5,600-plus other stocks that have ratings.

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

More CAPS Foolishness:

Sasol is a Motley Fool Global Gains and Motley Fool Income Investor pick. Chesapeake Energy is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletter services free for 30 days.

 When it comes to basketball, Fool contributor Matt Koppenheffer might be the guy Ron Shelton was thinking of with the title White Men Can't Jump. Matt does not own shares of any of the companies mentioned. The Fool's disclosure policy has a 55-inch vertical jump and can dunk from half-court. Or so we hear.


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