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5 All-Star Stocks Fighting the Tide

By Matt Koppenheffer - Updated Apr 5, 2017 at 7:55PM

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What's better than a high-quality stock? A high-quality stock that's shrugging off the market's sluggishness!

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 kicking the ball out to your team's superstars when they do have a hot hand.

There's no doubt that now's a tough time to try and find winners out there, but to find the current league leaders, I ran a simple momentum screen on The Motley Fool's CAPS screener (you can run the same screen here). Each of the companies below was up a double digit percentage over the past four weeks -- well ahead of the S&P's small gain -- and has been rated highly by CAPS players.

Stock

Four Week Change

12 Month Change

CAPS Rating (Max 5)

WellPoint (NYSE:WLP)

40.5%

(54.7%)

****

Valero (NYSE:VLO)

38.9%

(70.8%)

****

Petrobras (NYSE:PBR)

34.5%

(61.4%)

*****

Suncor Energy (NYSE:SU)

23.4%

(65.8%)

****

EMC (NYSE:EMC)

17.6%

(45.8%)

*****

Sources: Yahoo! Finance, Capital IQ, a division of Standard & Poors, and CAPS as of December 22.

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. In fact, I'll even kick off your research with a look at EMC.

Providing the pep
The market downturn over the past year has been an equal opportunity destroyer, taking its hatchet to companies across industries, countries, and sizes. There are some appearances that the smoke is starting to clear a bit now, and that means that some investors are picking through the wreckage to find some good deals. While companies like Citigroup (NYSE:C) that have had a very big hand in the financial fallout are still about as popular as Andrew Dice Clay at a Buckingham Palace afternoon tea, others have started to raise some investor eyebrows.

A good number of these are tech stocks that have lots of cash, little or no debt, and have little direct exposure to consumer spending. Cisco (NASDAQ:CSCO), for example, is trading at a notably low multiple compared to its historical valuation, sports an ironclad balance sheet, and was recently highlighted as a Best Stock for 2009 candidate. Similarly, EMC is trading well below historical norms, while sitting on a cash pile that's comfortably above its debt. Maybe it's not so surprising then that some investors are starting to wonder whether EMC is undervalued.

Looking ahead
There certainly are no guarantees for EMC as we head further into this global recession. As long as credit stays tight, EMC's customers may have trouble coming up with the money to buy EMC's products. General recessionary conditions may also create a drag as other customers put off purchases or go out of business altogether.

The stock's five star rating on CAPS, though, suggests that CAPS members see a much more sanguine future for EMC. Makinmoney11, for instance, recently gave a thumbs up and called EMC the "largest most diversified provider of enterprise storage solutions" and said, "given the + growth outlook for enterprise storage, EMC's leading market position, and attractive stock price, this is a for sure buy."

Aryamehr had a similar take, but also saw the company as a potential takeover target. This CAPS All-Star rated EMC an outperformer back in November and said: "Good stock and good value. In a sector with good growth potential. A possible buy out target by Cisco." 

Fielding your team
So do you think any (or all!) of these companies deserve a place on your All-Star team? You can share your thoughts on it or check out more of what your fellow Fools had to say about it or any of the other stocks above by stopping by CAPS. And while you're there, you can also take a peek at few more of the 5,400-plus other stocks that are rated on CAPS.

I think I heard a boo-yah somewhere out there -- thanks Stuart Scott!

More CAPS Foolishness:

Petroleo Brasileiro is a Motley Fool Income Investor recommendation. WellPoint is a Motley Fool Inside Value selection. Try any of our Foolish newsletters today, free for 30 days.

When it comes to basketball, Fool contributor Matt Koppenheffer might be the guy Ron Shelton was thinking of when he thought of 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 half court. Or so I hear.

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Stocks Mentioned

Dell EMC Stock Quote
Dell EMC
EMC
Citigroup Inc. Stock Quote
Citigroup Inc.
C
$53.19 (2.11%) $1.10
Cisco Systems, Inc. Stock Quote
Cisco Systems, Inc.
CSCO
$46.02 (2.45%) $1.10
Suncor Energy Inc. Stock Quote
Suncor Energy Inc.
SU
$30.85 (1.38%) $0.42
Anthem, Inc. Stock Quote
Anthem, Inc.
ANTM
$481.33 (-0.55%) $-2.64
Valero Energy Corporation Stock Quote
Valero Energy Corporation
VLO
$111.76 (0.98%) $1.09
Petroleo Brasileiro S.A. - Petrobras Stock Quote
Petroleo Brasileiro S.A. - Petrobras
PBR
$15.54 (0.65%) $0.10

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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