"The bigger they are, the harder they fall." It's the worst nightmare of every investor in today's market -- buying a rocket stock just before it takes a nosedive.

Now I readily admit that sometimes, stocks rise for a reason. But sometimes, the rise becomes the reason. No matter how often we caution them not to, investors do have a habit of buying "hot" stocks, and trusting momentum to keep 'em moving upwards.

Problem is, if the price goes up too much, even a great company can turn into a lousy investment (and if the company was less than great in the first place...) Below I list a few stocks that may have done just this. Stocks that, according to the smart folks at finviz.com, have more than doubled over the past year and just might be ripe to fall back to earth.



Recent Price

CAPS Rating

(out of 5)

MV Oil Trust (NYSE: MVO)



VMware (NYSE: VMW)



Baidu (Nasdaq: BIDU)



Incyte (Nasdaq: INCY)



Companies are selected by screening for 100% and higher price appreciation over the past 12 months on finviz.com. Current pricing provided by Yahoo! Finance. CAPS ratings from Motley Fool CAPS.

"These are a few of our favorite things ..."
Cloud computing, China's Internet, and even a cure for cancer. It's little wonder investors are so enamoured by these stocks. But which one is the best place for new money?

CAPS All-Star ScienceInvestor thinks Incyte's got a "great product line for the speculative investor." (And it's sure been a good bet so far.) brebrecola thinks Baidu's the better bet, predicting "Nothing will stop this train." Meanwhile, CAPS member acloe remains partial to VMware, pointing out that the company owns "80% of the virtual PC market share."

But when you get right down to it, the opinions of a few outliers aside, the consensus across CAPS is clear: The best bet to make more money out of these four already super-successful stocks, is MV Oil Trust, humble collector of oil rents in Kansas and Colorado.

But is it really reasonable to expect this mundane business model to trounce cancer, cloud computing, and China? Let's find out.

The bull case for MV Oil Trust
Way back in 2007, All-Star investor mplaut100 had already pegged MV Oil to outperform. Why? Because it doesn't face a lot of competition, sucking the last dregs of profit out of "mature producing properties that throw off a nice dividend."

Fellow All-Star ttboydxb agrees that the "dividend is awesome," while cashsage adds that in addition to being "a top yielding stock," MV Oil also "has a too low valuation compared to its assets."

Trust ... but verify
Now personally, I'm not quite sure whether I agree with that last bit. I guess it depends on how you define "assets." On the one hand, the company's primary asset seems to be the right to collect "net profits interest" on the oil and natural gas properties leased by MV Oil's parent company, MV Partners LLC. I guess that's worth a lot, but if you try to stick a number on this asset, the resulting valuation of 8.5 times book value at MV Oil doesn't really look all that great relative to, say, the 1.7 times book valuation at TransMontaigne Partners (NYSE: TLP), the 2.5 times book that Panhandle Oil and Gas (NYSE: PHX) would set you back, or even the 4.7 times book valuation at Dorchester Minerals (Nasdaq: DMLP).

But maybe it needn't be. Talk of assets notwithstanding, it seems to me most likely that what's really attracting investors to this stock is the "awesome" 13.8% dividend -- twice as rich as what either TransMontaigne or Dorchester pays their shareholders, and way, way more than the 1.3% payout at Panhandle. With a dividend this big, it may not matter how much MV Oil costs relative to its "assets." Doesn't matter, either, if the company's 12.5 P/E ratio looks a bit high relative to MV Oil's projected 7% long-term growth rate.

Foolish takeaway
At 13.8%, all that really matters is making sure that MV Oil can keep on paying what it's paying for at least six years -- the amount of time it will take to recoup your investment in full on the strength of the dividends alone. If you believe the company's capable of delivering on its dividend promise, it's probably a buy. If not, not.

So ... where do you come down on the issue? Click over to Motley Fool CAPS now, and tell us: Do you trust MV Oil Trust?

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. 555 out of more than 165,000 members. The Fool has a disclosure policy.

Baidu and Vmware are Motley Fool Rule Breakers picks. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community.