Get Ready for the Fall?

"The bigger they are, the harder they fall." It's the worst nightmare of every investor in today's market -- buying a rocket stock just before it takes a nosedive.

Every day, WSJ.com publishes a list of stocks whose shares have just hit new 52-week highs. And every day, investors read the list and tremble -- some with greed, others with terror. On our Motley Fool CAPS investing community, these top stocks usually enjoy favorable ratings, since everyone loves a winner.

But not always ...

Companies are selected from the "New Highs & Lows" lists published on WSJ.com on Friday last week. 52-week low and recent price provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

Each of these companies hit a new 52-week high last week, but which of 'em do Fools expect to set the next all-time high? If your answer is: "Google, 'cause it just beat earnings estimates by a mile" -- well, thanks for playing, but you're wrong.

Turns out, the 140,000-plus investors comprising Motley Fool CAPS think Google is only a slightly better bet than the woefully out-of-step-with-the-fact-we're-in-a-Recession Whole Foods. We think the best bet this week is down-to-earth gas piper Enterprise Products.

The bull case for Enterprise Products Partners 
In June, KyrieLoon laid out Enterprise's pros in a short and sweet list: It's "up to its elbows in natural gas and offers a range of processing, transportation and storage services. It has an interest in over 30,000 miles of pipelines, has a long history of profitability, has paid a consistently increasing dividend since 2005 ..."

Why should we buy into nat-gas as its price plummets? And why buy pipelines in particular? Tomdunno explains: "Nat gas will become a fuel source for autos and trucks in the future. This will force distribution to increase even if the price stays lower ... Companies involved in the distribution now will barely be able to handle the flow."

OK. But if this is a long-term trend we're talking about, why buy now? What's the rush? CAPS All-Star Roto1177 sums up the urgency in three words: "Huge insider buying."

How big is "huge"?
If you think Toto1177's exaggerating, just take a look at the Form 4's on this company. Over at form4oracle.com, you can see what's got Roto rooting for Enterprise Products. Namely, a massive $150 million splurge on Enterprise stock by company Chairman Dan Duncan.

Now I'll grant you that we've seen corporate bosses bet big -- and bet wrong -- on their companies before. Earlier this year, Goldman Sachs (NYSE:GS) got put in the awkward position of having to make margin calls on its own partners, who had bought too much stock on margin just before the crash -- too much Goldman stock! And closer to Enterprise's own spot in the oil patch, Chesapeake Energy (NYSE:CHK) CEO Aubrey McClendon got caught flatfooted in a similar margin misstep last year, forced to dump his entire 5% stake at a loss.

What's to prevent Mr. Duncan from sharing a similar fate? What's to encourage you to share the risk alongside him?

• First and foremost, we love it when management has "skin in the game," and shares the risk alongside us mere mortals. Duncan's doing that, and we applaud him for it.
• Second, have you seen the size of Enterprise's dividend? This company's paying out 7.4% every year -- and that's in addition to any profit you get when the stock itself goes up.

Time to chime in
Now mind you, with a P/E of more than 19 already, I'm not entirely certain we will see Enterprise Products' stock go up much more -- it's already pretty richly priced. But judging from his actions, the Chairman doesn't expect to see it fall. Nor do I.

But hey, feel free to disagree. If you've got a criticism to level against Enterprise Products, we've got a place to state your case. Click on over to Motley Fool CAPS, and sound off.