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 Monday. CAPS ratings from Motley Fool CAPS.

"Everybody loves a winner"
So I hear, and what can I tell you? With the Dow hitting 10,000 last week, there's no shortage of winners out there these days. Each of the five stocks named above has just crested a five-year high, and if you ask the 140,000 (and counting) investors on Motley Fool CAPS, they're not done running.

Today's list even features not one, but two Motley Fool Stock Advisor recommendations -- but we haven't yet picked a stock that's been sitting a long time at five stars (though it's just bumped down to four stars today). Does PetMed Express deserve a place in our portfolio? Read on, and you be the judge.

The bull case for PetMed Express
CAPS member twofromyourhand introduces us to PetMed as a company with a "[g]rowing customer base with increasing percentage of reorders coming from online. Virtually no overhead (and no product), but powerful brand. Possible takeover too...licensed nationally, save another retailer a lot of work."

CAPS All-Star 00100 agrees, praising PetMed's "[h]igh growth. No debt. Good cash flow" -- and concluding that it's now "[t]ime to declare a dividend." And what a coincidence! Just weeks after 00100 penned these words, detoyerofworlds (and frustrater of spellcheck) listed among PetMed's other attributes an "[a]ttractive valuation ... with a dividend to boot...love and own this stock!"

All that raises the question: Does PetMed's management read CAPS? I mean, on July 19, 2009, member 00100 asked the company to pay a dividend. Fifteen days later, management did just that, announcing its first-ever dividend payment. And this wasn't just chump change, either. Not the token nickel Oracle (NASDAQ:ORCL) flipped to shareholders when it began paying dividends earlier this year, or the eight cents Microsoft (NASDAQ:MSFT) counted out back in 2003.

Both of these larger tech titans showed reticence when they began paying dividends. PetMed, in contrast, jumped right into the game with a full dime-a-share dividend -- which works out to an entirely respectable 2.3% annual yield based on today's market cap.

Nor is the dividend the only reason to feel optimistic about PetMed. The stock trades for less than 17 times earnings, carries a near-15% projected growth rate over the next five years, and boasts free cash flow Fool-y 40% above what it reported as net earnings in the year ending June 30.

Combine all this with a balance sheet bursting at the seams with $60 million in cash and no debt whatsoever, and this all works out to a company value-priced at just 11.5 times its own free cash flow. If you ask me, that's a steal of a deal. Far from being overpriced here at its five-year high, I think PetMed has room to run higher.

Time to chime in
Of course, that's just my opinion. What's yours?

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