5 All-Star Stocks Fighting the Tide

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 will 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 it’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. Each of the stocks below was showing positive returns over the past four weeks -- despite the S&P's double-digit loss -- and has been rated highly by CAPS players.

Sources: Yahoo! Finance; Capital IQ, a division of Standard & Poor's; and CAPS as of Feb. 23.

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 Medtronic.

Providing the pep
While most companies and investors have been sweating bullets over the past couple of weeks, Medtronic has been chalking up wins.

Medtronic's earnings call contained a dose of optimism as normalized earnings per share grew 13% from the prior year, topping Wall Street's estimates. The company's cardiac rhythm disease management segment -- its largest -- stayed relatively flat after adjusting for currency changes. Some of the company's smaller divisions, though, picked up the slack and posted double-digit growth on a constant-currency basis.

Not long after the earnings announcement, Medtronic announced that the FDA had approved a device for the treatment of severe cases of obsessive-compulsive disorder. Though the device will be targeted at a relatively small group of the most dire cases, the approval potentially opens the door for Medtronic to introduce devices to help control other psychiatric disorders such as depression.

And finally, in a grand gesture that simultaneously suggested optimism about the future and fired a shot across the bow of Edwards Lifesciences, the company spent more than $1 billion buying two privately held players in the heart valve market.

Looking ahead
It'd be silly to assume that Medtronic isn't without its challenges. The health-care industry as a whole is teeming with uncertainty, and though the new administration has been a bit preoccupied with other matters, I fully expect it to turn its attention to health care the first chance it gets. At the same time, Medtronic's major competitors are health-care superpowers like Boston Scientific (NYSE:BSX) and Johnson & Johnson (NYSE:JNJ) -- not the kind of companies that give you a lot of room to slip up.

I'd stick with the optimists on this one, though, particularly with the stock down about 40% from its previous highs -- it’s now trading at less than 12 times expected earnings for its full fiscal year (which ends in April). The company has a great base of business in the cardiac world as the leader in pacemaker sales, and continues to build its business in other areas. And it's tough to ignore the recession-fighting power of the health-care industry.

OpesPerPrudentia, a CAPS All-Star, joined the group of CAPS players singing Medtronic's praises back in early January, saying:

The healthcare industry in the United States has nothing but growth ahead of it as increasing numbers of Boomers require healthcare and medical electronics that hospitals and standard in-office practices simply will not be able to keep up with. Any company with this kind of cash flow that aims to put medical tech in the hands of homecare outfits and even patients will explode with every passing year.

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 them, or check out more of what your fellow Fools had to say, when you stop 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 “booyah” somewhere out there – thanks, Stuart Scott!

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