Top-Rated Stocks Blowing the Doors Off This Market

No one has perfect foresight, but let's be honest: The market is full of people who, as Oscar Wilde would say, know "the price of everything and the value of nothing." Far too often -- over the past year especially -- investors have been pitched sensational stock recommendations, only to be left high and dry as shares crumble.

To hunt down top-recommended stocks that have been rewarding investors accordingly, I summoned our Motley Fool CAPS community to point out a few four- or five-star stocks that have been shootin' for the moon in recent months.

While they're not formal buy recommendations, these three-month bloomers caught my attention:

Data from Motley Fool CAPS, and Yahoo! Finance as of Sept. 13.

You can rerun the CAPS screen I used by clicking here.

A closer look at UnitedHealth
After President Obama's health care speech before a joint session of Congress last Wednesday, we can arguably retreat from the fetal position and take one big fear off the table: The health-care industry isn't about to be sucked into a government pit of socialistic doom. The possibility of a widespread takeover of the entire industry looks highly unlikely. It simply isn't politically feasible.

The worst-case scenarios for the health insurance industry are off the table. "Attempts at health care reform are largely failures. Even when they do succeed, they are piecemeal efforts that in no way seriously challenge the business models of profitability of insurers," writes CAPS member WPThatcher.

That's great news for a company like UnitedHealth, even more so than for other insurers. As fellow Fool Shannon Zimmerman wrote last week:

So what's UnitedHealth got that [Aetna (NYSE:AET) and WellPoint (NYSE:WLP)] don't?

Just this: A valuation profile that prices the firm well below even a painstakingly conservative estimate of fair value. The company is cheaper than the broader market (as measured by the S&P 500), and it's trading at a healthy discount relative to peers in terms of price-to-cash flow over the last 12 months, too.

Even after a big run-up, UnitedHealth shares trade at about nine times forward earnings. Now put that in the context of current uncertainty in the health care industry: At nine times earnings, shares are already pricing in an environment with reduced margins and some sort of competition from the government. The worry is priced in. It's still expected. Shares are waiting for the ax to fall -- waiting to be greeted by a flurry of bad news.

Bad news that now looks like it won't be nearly as bad as most expected. There's a mountain of truth behind CAPS member WideMoatValue's simple theory that UnitedHealth will "thrive regardless of Obamacare passage, undervalued, best of breed." Or TMFmrquakeroats's paraphrase from legendary value investor Bruce Berkowitz:

I like Berkowitz's argument that even with the possibility of the government stepping in to the health care industry there is no one else that can provide the services that companies like [UnitedHealth] can provide. As Bruce B. says, "who else is gonna do it?"

Your turn to chime in
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