3 Stocks Ready to Roar

There are plenty of strategies for picking stock winners, from finding low P/E stocks to seeking companies selling at a discount to their future cash flows. At the small-cap investment service Motley Fool Hidden Gems, even in this market, the analysts are able to stay ahead of the pack by finding undervalued stocks that Wall Street and investors have ignored.

But what if we could whittle down our list of prospects beforehand, to find those whose engines are just getting warmed up?

Using our investor-intelligence database at Motley Fool CAPS, I screened for stocks that were marked up by investors before their share prices rose over the past three months. My screen returned 93 stocks, no doubt reflecting the market's continued recovery during that time, and included these recent winners:

Source: Motley Fool CAPS screener; trailing performance from March 5 to June 1.
CAPS rating = out of five stars.

GSI Technology, in fact, was picked as a stock ready to run just this past January. But while this screen might tell us which stocks we should have looked at three months ago, we'd rather find the stocks that we ought to be looking at today. So I went back to the screener and looked for stocks that were just bumped up to three stars or better, sport valuations lower than the market's average, and haven't appreciated by more than 10% in the past month.

Of the 50 stocks the screen returned, here are three that are still attractively priced, but which investors think are ready to run today:

Source: Motley Fool CAPS screener; price return from May 7 to June 1.
CAPS rating = out of five stars.
P/E = price-to-earnings ratio.

You can run your own version of this screen over on CAPS; just remember that the data's dynamically updated in real time, so your results may vary. That said, let's examine why investors might think these companies will go on to beat the market.

Emergency Medical Services
There are certain government-run services, like policing, that many people can't imagine the private sector providing. There was also a time when emergency aid services such as those provided by Emergency Medical Services Corp. and Rural/Metro (Nasdaq: RURL) -- which also provides fire protection – were unthinkable, but the companies have seen success. Today, private ambulance services are commonplace, and EMS Corp. has been a growing force, primarily as a result of acquisitions.

CAPS member KyBubba1 thinks the ambulatory side of the business might face tougher growth prospects, but the physician side looks good:

As more and more private physicians want to take care of patients in the hospital, the market for hospitalists and ED docs will keep growing. Not sure if they can continue to profit on the ambulance side, though. The facility based profits should more than compensate for weakness on the streets.

GOL Linhas Aereas Inteligentes
One of the keys to instilling investor confidence in your airline is continually upgrading your planes. Brazilian airline operator GOL Linhas Aereas Inteligentes has been steadily renovating its fleet while also adding international agreements. For example, it recently announced it would be offering regular flights between Brasilia and Barbados. 

More than 300 CAPS members have rated the airline to outperform the market averages, and would undoubtedly agree that GOL looks poised to prosper given an increasingly vibrant and wealthy Brazilian economy.

Pinnacle Airlines
Regional airline Pinnacle Airlines is another operator gaining altitude. Air traffic rose almost 3% in April, the latest month available, as capacity rates held steady from the year-ago period. Pinnacle operates regional flights for Delta Air Lines (NYSE: DAL).

The industry itself is undergoing consolidation, with Continental Air Lines (NYSE: CAL) ready to consume United, and that should help lower capacity numbers, making all the airlines more competitive. Although your own flight may become more expensive, crowded, and uncomfortable.

More than 90% of the CAPS members rating Pinnacle think it's ready for takeoff, so why not head over to the Pinnacle Airlines CAPS page and share your thoughts on an industry Warren Buffett has famously sworn off.

Three for free
Are these companies still a good value and ready to make their move? I'm heading over to CAPS to mark them to outperform the broader averages. If you agree join me there, or let us know in the comments section below whether you think these or any other stocks are starting to rev their engines.