The clock's ticking down, your team's down one, you're being double-teamed, and you wouldn't have enough time to get off a good shot even if you were allowed to drop-kick both defenders. So who do you dish the rock to?
Your first thought might be the resident superstar -- the Kobe Bryant or Tracy McGrady. But what if Kobe, as good as Kobe is, is playing colder than an Alaskan snowdrift? That's right, you dish to the guy with the hot hand, the guy who will be deemed en fuego tomorrow on ESPN.
Momentum investors are looking for stocks in a similar state of sizzle when they make investments. They want to give the nod to the stocks that are hot to the touch.
What sounds more interesting to me than simply looking for stocks that have momentum, though, is finding high-quality stocks that also have some positive inertia on their side. Imagine being able to kick the ball out to Michael Jordan or Larry Bird when they do have a hot hand.
To accomplish this, I cross-referenced a pretty simple momentum screen with data from The Motley Fool's new investing community, CAPS. The result is a few all-star stocks that all have a fiery shooting hand now. Each of the companies below is up 30% or more over the past year, is within 5% of its 52-week high, and has been rated highly by CAPS players.
|
Stock
|
12-Month Change
|
Percent Below 52-Week High
|
CAPS Rating (out of 5)
|
|
Oppenheimer Holdings (NYSE: OPY)
|
107%
|
0.5%
|
*****
|
|
EMC (NYSE: EMC)
|
70%
|
0.0%
|
****
|
|
Vodafone Group (NYSE: VOD)
|
60%
|
0.9%
|
****
|
Sources: Yahoo! Finance, Capital IQ, and CAPS as of July 2.
At first glance, this sure looks like a high-quality trio. But, as always, I strongly advise taking a close look before you throw a bounce pass in the direction of any of these stocks.
Under the radar on Wall Street
When it comes to investing in Wall Street firms, it's typically the names like Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) that get mentioned first. Of course, Morgan Stanley is a $76 billion company, and Goldman is an even larger $95 billion. What if you're looking for a smaller growth story on Wall Street?
Oppenheimer -- a Canadian company that provides asset management, brokerage, investment advisory, and investment banking services -- could be one to check out. The stock has more than doubled over the past year, but it is still valued at less than $1 billion. Between 2002 and 2006, the company boosted revenue by 167%, and net income has grown an even faster 380%.
On CAPS, the stock has only attracted 30 ratings so far, but all 30 players have rated the stock an outperform. CAPS All-Star PeterLinch, one of those 30 bulls, recently shared his thoughts on Oppenheimer:
Oppenheimer has been on my watchlist for a while and has had a big run up as of late, but the earnings growth continues to impress. Even with the run up these shares are still on the cheap, especially for a financial service company that is so relatively small.
This small cap has all of the things you love to see. They have tremendous inside ownership, low debt, and solid management. I think this will easily be a 2 or 3 bagger over the next 5 years. My price target on these shares is $63-$64 a piece.
And that's the team for this week. You can check out more of what your fellow Fools had to say about these stocks by stopping by CAPS, and while you're there, you can also take a peek at a few more of the 4,700 other rated stocks.
I think I heard a "booyah" somewhere out there - thanks, Stuart Scott!
More CAPS Foolishness:
Vodafone is a
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When it comes to basketball, Fool contributor Matt Koppenheffer might be the guy Ron Shelton was thinking of when he came up with the title White Men Can't Jump. He does not own shares of any of the companies mentioned. The Fool's disclosure policy has a 55'' vertical jump and can dunk from halfcourt. Or so I hear.
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