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 Friday. CAPS ratings from Motley Fool CAPS.

Few investors would argue that 2009 was a "great" year for stocks in general, but every rule has its exception, and you can find five such exceptions up above. Five stocks that did fine in '09, and ended the decade at their highest peaks in (half) a decade.

The contrast between these winners' performance and the rest of the market's couldn't be clearer, yet as we can see today, investor opinions on their futures differ wildly. Almost no one expects a repeat of last year's performance at Green Mountain or Cree, while IMAX and IBM merit mere shrugs of indifference. In fact, the only stock on the list still driving investors mad with greed is Teva Pharmaceutical. Let's find out why.

The bull case for Teva Pharmaceutical
CAPS member perremon2010 loves the business model at Teva, describing it as: "Vacuuming up drugs as they become generic. Growing fast. Has a platoon of lawyers fighting (and winning) approval to get patented meds turn to generic sooner."

CAPS All-Star investor dhd1491 believes that: "Teva will be a dividend monster of the future. Teva has increased its dividend each year by 34% average over the last ten years. ... Generics, in particular, will benefit from the current effort to rein in escalating health costs. Teva, the largest generic-maker in the world, is right in the sweet spot for top line growth."

And mitleg agrees, predicting that: "Worldwide the rise in health-care costs especially generics will ensure a market for years to come. Health care also could rise once the reform debate is over."

Generic physician, heal thyself
And yet, generics have recently proven a sore point for Teva bulls. In the course of upgrading the stock in mid-December, one Wall Street Wizard warned that: "it is not even fully known which of the specific amino acid chains are therapeutically active" in Teva's multiple sclerosis drug Copaxone, giving rise to the possibility that Teva could be hoist with its own petard, faced with generic competition for its "highest margin product" as soon as 2014.

Regardless of the risk, Piper Jaffray went ahead and upgraded Teva anyway. Remember, though, that this was the same analyst that told us to buy Cephalon (NASDAQ:CEPH) last December, and Genzyme (NASDAQ:GENZ) in March. Should we really be listening to Piper now? (Hint: Both stocks are down significantly since Piper recommended them.)

Foolish takeaway
Worried by Piper's record, I did a little number-crunching of my own last month, trying to see how Teva stacked up. My conclusion: If everything goes as well as Wall Street expects, then the stock could be fairly valued at about 17.5 times free cash flow, versus growth estimates of 16%.

On the other hand, if the warned-of genericization of Copaxone comes to pass, and the best Teva is able to manage is 7% long-term growth, look out below. Seeing as how Teva's share price has instead grown 6%, I simply must disagree with the majority on this one: It's not yet time for Teva.

(But hey, feel free to disagree -- most everyone else already does. Here. I'll even give you a soapbox to stand on. Shout away.)