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.
To find these league-leading winners, I cross-referenced a simple momentum screen with data from The Motley Fool's CAPS investing community. Each of the companies below is up 30% or more over the past year, now trades within 5% of its 52-week high, and has been rated highly by CAPS players.
|
Stock |
12-Month Return |
Percent Below 52-Week High |
CAPS Rating |
|---|---|---|---|
|
Key Technology (Nasdaq: KTEC) |
153% |
0% |
***** |
|
Barrick Gold (NYSE: ABX) |
86% |
0.7% |
**** |
|
Parexel International (Nasdaq: PRXL) |
73% |
2.4% |
***** |
|
Agnico-Eagle Mines (NYSE: AEM) |
64% |
1.5% |
**** |
|
Waste Industries (Nasdaq: WWIN) |
35% |
2.2% |
**** |
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.
The Key is agriculture
This isn't the first time that I've highlightedKey Technology here, and it won't be the last -- especially if the agricultural sector continues to boom the way it has been. Key manufactures processing equipment for the food, tobacco, and pharmaceutical industries. Thanks to accommodating market conditions and some new product introductions, the company saw significant improvement in its financials during 2007.
For the fiscal year that ended back in September, Key tallied $108 million in revenue, up 27% from the prior year. On the bottom line, it moved from a small loss for fiscal 2006 to a profit of $7.4 million.
On CAPS, the stock has gotten the thumbs-up from 131 of the 132 players who've rated it, including 39 All-Stars. Stockscreener called the stock an outperformer back in June, highlighting both the stock's momentum and its consistent positive earnings surprises. Meanwhile, DiscoJohn, one of CAPS' top players, thinks highly of the product, arguing that "this company is producing what will become a segment in the backbone of every manufacturing process."
So does Key Technologies 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. While you're there, feel free to take a peek at more of the 5,000 other stocks CAPS rates.
I think I heard a "boo-yah" somewhere out there -- thanks, Stuart Scott!
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