In my weekly Fool column "Get Ready for the Fall," I run'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:


Recent Price

CAPS Rating

(out of 5)

Bull Factor

Universal Health Services (NYSE: UHS)




Atheros Communications



97% (Nasdaq: CTRP)




Kinder Morgan Energy




Green Mountain Coffee (Nasdaq: GMCR)




Companies are selected from the "New 5-Year Highs" list published on MSN Money on Friday. CAPS ratings from Motley Fool CAPS.

Safe stocks ... and the rest
Is the recession over? Warren Buffett says it is, and with the Dow now pushing 11,000, and the S&P posting sizeable gains of its own these past five weeks, investors seem to be coming around to Buffett's way of thinking. Bullish sentiment is back, and the five stocks named above are all hitting five year highs. The real question is whether they'll stay there.

The good news is: Most CAPS investors seem to view most of these stocks as safe, and perhaps even underpriced (with the perpetual exception of Rule Breakers recommendation Green Mountain). Motley Fool Hidden Gems picks like Atheros and Ctrip are getting a disproportionate amount of the love, yet the most interesting tidbit I glean from today's list is that the one stock topping the charts of investor hearts is a company we have not yet recommended.

To help figure out if we should, and if you should, let's now take a moment to consider ...

The bull case for Universal Health Services
CAPS member fringedweller spotlighted Universal Health as far back as 2006, praising the company for: "Planning organic growth in key markets that demonstrate growth and high margin potential."

And while it's true that the economy's since taken a turn for the worse, CAPS member 2sw33t believed about two years ago that "everybody's affected by a downturn in the economy, but that doesn't prevent people from seeking health care."

CAPS All-Star bigfattydog agrees. Peering into a crystal ball back then, this member wrote: "All us baby boomers will be needing things over the next 10 years and will need places to have them done. As an RN, I see health care stocks as always a sure bet. Sometimes they may go down, but in the long run- they seem to maintain their value."

Prescient 'picking
And even add value. Fact is, bigfattydog's Universal Health endorsement has been anything but a dog of an investment, beating the market silly over the past couple of years, and racking up 32 percentage points worth of market outperformance. Over the past year in particular, as the health care debate raged on, this operator of acute care and surgical hospitals, ambulatory surgery centers, and radiation oncology centers has racked up gains far in excess of what insurance heavyweight UnitedHealth Group (NYSE: UNH) or drugmaker Johnson & Johnson (NYSE: JNJ) could boast.

But is Universal Health really the biggest beneficiary of Obamacare?

Maybe not. In fact, in a roundtable discussion the Fool sponsored in January, examining the likely winners and losers from health-care reform, our analysts concluded that the best bets to profit from Obamacare were drug companies like J&J, Pfizer (NYSE: PFE), and Merck. In contrast, Bryan White argued convincingly that: "Health-care providers such as hospitals and long-term care facilities will get hit the hardest by reform legislation," suffering from medicare reimbursement cuts that make up "a substantial part of their revenue."

Of course, were Universal Health Services trading at a price reflecting this risk, and leaving room for upside, I might be inclined to brave the risks and follow the CAPS herd in endorsing it. Problem is ... it isn't. In either respect.

After running up 90% in the last year, Universal Health looks vastly overpriced relative to its potential. Owing nearly $1 billion in debt with less than $10 million in cash, and paying only a miserly 0.5% dividend, the stock trades for nearly 14-times trailing (read, "before any health-care reform hit") earnings, and a nosebleed 25-times free cash flow. Moreover, analysts expect Universal Health to post only 10% annual earnings growth over the next five years.

Foolish takeaway
To me, the price on this one simply does not justify the risk of buying it -- from Medicare rate cuts, from overvaluation, from simple failure to execute. My advice: Seek elsewhere, dear Fool. There are better values out there.

Of course, that's just my opinion. As reflected in its five-star CAPS rating, there are plenty of Fools out there who disagree with me -- and if you're one of 'em, don't be shy: Tell us why.

On Motley Fool CAPS.

Atheros and Ctrip are Motley Fool Hidden Gems recommendations. Pfizer and UnitedHealth Group are Inside Value picks. Green Mountain is a Rule Breakers recommendation. UnitedHealth is also a Stock Advisor pick. Johnson & Johnson is a Income Investor choice. Motley Fool Options has recommended a buy calls position on Johnson & Johnson. The Fool owns shares of Atheros Communications and UnitedHealth Group.

Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked No. 775 out of more than 160,000 members. The Motley Fool has a disclosure policy.