Hot Stocks You're Buying Now

Welcome back to another Foolish review of the hottest stocks as ranked by 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.

First up: a nap. I mean it. Sleepy industrial textile suppliers such as Xerium Technologies (NYSE: XRM  ) have risen an eye-opening 35.3% over the past 30 days. If only a triple-shot, no-foam, no-whip espresso were as rewarding.

Second place brings the triumphant return of molecular diagnostics companies such as Luminex (Nasdaq: LMNX  ) and Nanosphere (Nasdaq: NSPH  ) . As a group, they've risen 30.9% since early May.

And in third? Manufacturers of construction materials have produced a 26.4% average return over the past month. And that's in spite of the drop-anchor deadweight that has been market laggard Headwaters (NYSE: HW  ) .

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

Company

CAPS Stars (out of 5)

No. of CAPS Ratings

Percent Bulls

30-Day Price Change

Lydall (NYSE: LDL  )

*****

48

93.8%

27.8%

Owens Corning (NYSE: OC  )

****

295

95.9%

23.2%

Sources: Motley Fool CAPS, Yahoo! Finance as of June 2.

And your favorite short candidates -- i.e., those rated with one or two stars in CAPS -- are:

Company

CAPS Stars

No. of CAPS Ratings

Percent Bears

30-Day Price Change

Albany International

*

24

58.3%

(5.8%)

Unifi

*

26

50.0%

3.1%

Sources: Motley Fool CAPS, Yahoo! Finance as of June 2.

My favorite stock among today's contenders is Lydall because it looks like the sort of stock that Foolish colleagues Bill Mann and Seth Jayson might consider for our Motley Fool Hidden Gems small-cap service. Here's why:

  • Only one Wall Street analyst follows the company.
  • It operates in a necessary but boring segment -- specially engineered products for the auto and building-products industries.
  • Insiders still own more than 3% of the business.
  • Margins are stable, and return on invested capital has been steadily improving.

I also like that top value investors, such as the market-beating team at the Royce Opportunity (RYPNX) fund, are buying shares. That's because, if CAPS winners such as manucastle are to be believed, Lydall is the sort of small cap Warren Buffett would buy if he could.

Of course, that's just one Fool's take. Would you buy Lydall 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:

Headwaters is a Motley Fool Rule Breakers recommendation. Try this market-beating service free for 30 days. There's no obligation to subscribe.

Fool contributor Tim Beyers, who is ranked 17,661 out of more than 105,000 participants in CAPS, didn't own shares in any companies mentioned in this article at the time of publication. See Tim's portfolio and his latest blog commentary. The Motley Fool's disclosure policy is hotter than city asphalt in the summer heat.


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