5 Stocks That Just Won't Quit

In my weekly Fool column "Get Ready for the Fall," I run Nasdaq.com's 52-week highs list through the "wisdom of crowds" meter we call Motley Fool CAPS. The result: a list of stocks that have flown so high, investors are starting to get nervous about that whole "gravity" thing. But while many stocks will indeed plunge back to Earth, some seem immune to gravity, steadily riding a rising megatrend to ever-greater heights.

Today, we'll move beyond stocks that have hit 52-week highs, and identify companies now surpassing five solid years of outperformance. Which of these will thrash the market averages for another half-decade? Here are this week's leading contenders:

Companies are selected from the "New 5-Year Highs" list published on MSN Money on Friday. CAPS ratings from Motley Fool CAPS.

Safe stocks ... and the rest
Is the recession over? Warren Buffett says it is, and with the Dow playing tag (1, 2, 3 -- not it!) with 11,000, and the S&P posting sizeable gains of its own these past six weeks, investors seem to agree with Buffett's way of thinking. Bullish sentiment is back, and the five stocks named above are all hitting five-year highs. The real question is whether they'll stay there.

But -- brace yourself -- they might not. Or at least, not many of them. Poll the CAPS community, and most investors seem to think salesforce, DirecTV, and Human Genome have all had their 15 minutes of fame, and time is running out for these stocks. In contrast, Fools believe the House of Mouse retains a firm foundation, and see even greater prospects ahead for Silgan Holdings.

Silgan who?
Silgan Holdings. The folks who make cans and lids for so many of the nation's better-known manufacturers, from Clorox (NYSE: CLX) to Coca-Cola (NYSE: KO) to Procter & Gamble (NYSE: PG). If you've never heard of Silgan, though, don't be embarrassed. Until just recently, neither had I. But with rival metal container-maker BWAY Holding getting a take-out bid from private equity last month, Silgan's been tossed into the spotlight as savvy investors look for an analogy.

CAPS member Clint35 likes the company's below-market P/E (15) and respectable dividend (1.3%) and sees nothing wrong with these numbers being tied to "a slow steady and boring biz." All-Star mpendragon agrees, praising Silgan last for its "real growth potential" while observing that on the downside, this "business ... is fairly crash resistant." Another of our All-Stars, lemus, calls Silgan "definitely one of the dominant players in the world, in the container business. Silgan is North America's largest manufacturer of metal containers."

Silgan's packing profit
So cheap, with potential for growth, big in the U.S. of A., and "dominant" globally. What's not to like about that?

Very little, as it turns out. Taking a gander at the company's financials recently, I found Silgan every bit as attractive as our CAPS members told us it would be. While analysts' 8.4% projected five-year annualized growth rate may not impress, Silgan has grown at nearly twice that rate over the last five years, and beaten consensus projections in each of the past four quarters.

Ah, but will it grow fast enough to justify that 15 P/E?

Maybe -- but to my Foolish eye, the stock's a bargain even at slower growth rates. You see, the GAAP numbers that make up Silgan's income statement don't tell the whole story about this company. (Do they ever?) To see how truly profitable this company is, you need to examine its cash flow statement, where you'll find that Silgan generated more than $223 million in free cash flow last year -- 40% more than its reported net income.

Foolish takeaway
Silgan may not be the screaming-est bargain on the stock-block. But with an 8.4% expected growth rate, a history of exceeding such expectations, and an entirely reasonable 1.3% dividend yield, I think the stock's price of just 11 times free cash flow looks entirely justified. Meaning there's no reason to suspect that the stock's done running yet.

That's my opinion -- but it's not just mine. Over on Motley Fool CAPS, Silgan is currently one of only a handful of stocks currently garnering unanimous, 100% positive opinion from our stock pickers.

But if you just absolutely, positively have to burst their (our) bubble ... feel free. If you've got reason to doubt the bull thesis on Silgan, click over to Motley Fool CAPS now, and sound off.