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.

Party like it's 1999
Friday's selloff on Wall Street notwithstanding, the Dow's still crowding 10,000. And credit for this goes to a raft of tech winners drawn straight from the headlines of the Internet Bubble ... Of course, we all remember what happened to said Bubble. Is it any surprise that investors reading these names seem skittish over their prices -- Priceline at a 39 P/E, Amazon at 81, and Baidu valued at 85?

But if that's the case, then they can take some comfort in the fact that at least one of the names up above has absolutely nothing to do with e-business. Lubrizol is its name, and chemical additives and lubricants are its game. Let's find out a little more about this top-ranked stock as we dig into ...

The bull case for Lubrizol

• Way back in 2007, CAPS member fast1x2 highlighted Lubrizol as an "[o]il and fuel additives leader" in a chemicals industry dominated by the likes of BASF and Dow Chemical (NYSE:DOW).
• In early 2008, whammabamma called Lubrizol "[i]nnovative and acquisitive" and likes the fact that "they actually produce something" other than lines of zeroes and ones.
• And not only that, but as Survivn2 pointed out in August, Lubrizol makes enough money selling its "somethings" to pay its shareholders a tidy "2.1% dividend." (Which has since shrunk to 1.7%. But shareholders aren't complaining -- the only reason the dividend yield has dropped is because the stock has gone up.)

Gone up quite a lot, as a matter of fact. And this brings us to the real point of today's column: With Lubrizol now sitting atop a five-year high, what are the chances that it can climb any further?

As it turns out, those chances look pretty good. This company has been a remarkably steady profit generator in both boom times and bust. You see, while a sizeable goodwill impairment charge taken late last year left Lubrizol looking unprofitable, this lack of a "P/E ratio" isn't nearly as bad of news as it appears.

Why not? Over the past five years, Lubrizol generated average annual free cash flow of $187 million -- more than 50% greater than its reported "profit" under GAAP. The trend continues to the present day, where Lubrizol's massive $385 million in trailing free cash flow puts the lie to its apparent lack of GAAP profit. And selling now for just 13 times its free cash, the stock looks fairly priced for its growth prospects (analysts predict 12.4% annual growth over the next five years.)

Foolish takeaway
If the bullish noises emanating from market bellwethers like Caterpillar (NYSE:CAT) and UPS (NYSE:UPS) are any indication, the industrial gears of our economy are starting to click back into place. In which case, Lubrizol just might be the stock that will keep 'em churning smoothly.

Of course, that's just my opinion. If you feel inclined to toss a monkey wrench into the works, fire away.

Motley Fool CAPS : It's fun, it's free, and it just might make you famous.