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 just 136 stocks when I ran it, no doubt reflecting the market's turmoil during that time, and included these recent winners:

Source: Motley Fool CAPS Screener; trailing performance from Sept. 17 to Dec. 17.

FSI International, in fact, was previously picked as a stock ready to run in September, and represented a period when the market rose by 10.5%. 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, sport valuations lower than the market's average, and haven't appreciated by more than 10% in the past month.

Of the 36 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 Nov. 19 to Dec. 17.

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.

Universal Travel Group
Stung by the stigma of questions about the truthfulness of its financial statements -- like we haven't heard that song sung before -- Universal Travel Group is trying to gain traction and tap into the broad success that other online travel agents such as priceline.com (Nasdaq: PCLN) and Expedia (Nasdaq: EXPE) now enjoy in Asia.

Despite these concerns, 95% of CAPS members rating the OTA believe it will outperform the broad market averages. Adding Universal to your watchlist allows you to stay on top of all the Foolish news and analysis as it develops.

Collectors Universe
This past summer, Collectors Universe looked poised for growth, as rising gold prices put its grading and authentication services front and center. Indeed, in just two short months, its stock soared 30%, after the company boosted its dividend to $0.325 per share.

But after reporting quarterly results that apparently disappointed the market, the stock has given back about 17%. Today, its dividend yields 9% annually. CAPS member kleyau says the success of Collectors Universe hinges on a single factor: "Simple business model based on reputation. This requirement for a trustworthy reputation is a barrier to entry, but if it does go down, so does the company."

With 88% of the CAPS members who've rated it grading the authenticator to outperform the broad market averages, it's apparent that our community believes the company's still worth collecting in your portfolio. Let us know whether you agree on the Collectors Universe CAPS page.

Frisch's Restaurants
The Big Boy sandwich -- a double-decker burger -- was born in California at a local joint called Bob's Pantry in the 1930s. It was franchised out through a number of early investors, including David Frisch and the founder of Shoney's, but only Frisch's Big Boy remains today.

Yet diners traveling across the country were able to find Bob's Big Boy, Frisch's Big Boy, and Elias Big Boy, because unlike McDonald's (NYSE: MCD), founder Bob Wian didn't require uniformity in its chain.

Frisch's Restaurants, though, has been publicly traded since 1960. Today, it operates 91 Big Boy restaurants and 35 Golden Corral restaurants, all within a 500-mile radius of Cincinnati. The family-style restaurant chain is flying under analysts' radar, but 81% of the CAPS members who've rated it think it's got big potential.

You can add the restaurant to the Fool's free portfolio tracker, then dive in on the Frisch's Restaurants CAPS page or in the comments section below. Let us know whether this Big Boy can still offer double-decker returns.

Three for free
Are these companies still a good value, 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.