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 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 just 59 stocks when I ran it, no doubt reflecting the market's turmoil during that time, and included these recent winners:


CAPS Rating
Feb. 25

CAPS Rating
May 25


13-Week Performance

Altera (Nasdaq: ALTR)




American Tower




Bunge (NYSE: BG)




Source: Motley Fool CAPS screener; trailing performance from May 28 to Aug. 25.

Bunge, in fact, was picked as a stock ready to run in May. 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. I went back to the screener and looked for stocks that were just bumped up to three stars or better and sport valuations lower than the market's average, and whose share prices haven't appreciated by more than 10% in the past month.

Of the 59 stocks the screen returned, here are three that are still attractively priced, but which some CAPS investors think are ready to run today:


CAPS Rating May 25

CAPS Rating Aug. 25


4-Week Performance

P/E Ratio

Chico's FAS (NYSE: CHS)





International Rectifier (NYSE: IRF)





TrustCo Bank Corp NY (Nasdaq: TRST)





Source: Motley Fool CAPS Screener; price return from July 30 to Aug. 25.

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.

Chico's FAS
CAPS member ValueDragonStyle finds several reasons why women's clothing retailer Chico's FAS is a good value play. It has been knocked about and not only sits well below its 52-week highs, but also just above its 52-week lows. Like Coldwater Creek (Nasdaq: CWTR), which targets a similar clientele, Chico's has had to fashion a turnaround during the recession, causing both to address inventory issues.

At just 14 times earnings, Chico's is similarly priced to other retailers catering to a conservative business look for women. And with its growth prospects, it looks poised to come out ahead. Of the CAPS members rating it, 87% would agree it's ready to post some market-beating results; add your own opinion on the Chico's FAS CAPS page.

International Rectifier
Analysts are worried that the semiconductor cycle that helped bolster sales at chipmakers like International Rectifier, Altera, and Volterra Semiconductor (Nasdaq: VLTR) has peaked because inventories that were drawn down during the recession have now been replenished. That would certainly help explain the strong results from recent quarters, but the companies are still anticipating good growth.

While Volterra's guidance is in line with Wall Street's forecast for the next quarter, International Rectifier's management sees revenues coming in well ahead of expectations. On CAPS, 90% of the members rating International Rectifier also believe it will outperform the broad market averages.

TrustCo Bank Corp NY
Earlier this year, TrustCo Bank Corp NY was yet another company featured as a stock ready to roar, just before it began a 20% rise in two months. Now its stock has returned to where it was, and some in the CAPS community think it's positioned for yet another climb. The fairly conservative institution avoided a lot of the subprime mess that ensnared many of its peers and has consistently paid a dividend for more than a century. That history of careful stewardship attracted CAPS member FutureIsComing in April.

Well run bank that never got involved with subprime. Will be in competitive shape for the recovery

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.

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Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.