"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 upward.

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 doubled (or nearly so) over the past year, and just might be ripe to fall back to earth.


Recent Price

CAPS Rating (out of 5)

BorgWarner (NYSE: BWA) $77.75 ****
JDS Uniphase (Nasdaq: JDSU) $27.37 **         
Rare Element Resources (NYSE: REE) $11.44 *

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

Question: What do automobile engines have in common with communications equipment? What do either of these things have to do with mining rare earth elements? Answer: The companies behind these endeavors boast some of the hottest stocks on the market today. Over the past year, BorgWarner's stock clocked a turbocharged growth rate of 106%. JDS shares are approaching the speed of light -- up 140%, and Rare Element Resources did best of all, posting a 222% gain.

[Pause for applause.]
Congratulations all around. But now that the stocks have taken their bow, it's time to ask the important question: They've all done well over the past year, but which of these companies will excel in 2011?

Defying the skeptics who deride its lack of profits (or even revenues), CAPS member mfzygon argues that the best time to buy Rare Element Resources is before it starts "seeing revenues and profits." In contrast, JDS-U has already turned profitable, and last week's news that Juniper Networks (Nasdaq: JNPR) is introducing a switch that requires parts from JDS sent the latter stock flying higher. Thanks to "constant Internet traffic growth," CAPS member rer2011 sees no reason JDS' surge should stop any time soon.

And yet, these Fools remain in the minority (for now). Poll the broader CAPS community, and the verdict is clear: If you really want to make money in 2011, you're better off popping the hood at BorgWarner.

The bull case for BorgWarner
Why is that? In a gas-thirsty world, where oil now costs more than $100 a barrel, CAPS member Jlittl likes the fact that BorgWarner is a "leader in fuel efficiency techonolgy."

A leader both internationally (CAPS All-Star nibs61 points out that the company gets nearly three-quarters of its revenues from outside U.S. borders, and "where are we seeing market growth especially in automobiles ??? Internationally") ...

... and here at home as well. Fellow All-Star investor LazyEyedFreak argued last month that "turbo diesels slowly becoming more common in US small/midsize vehicles coupled with smaller displacement turbocharged gas engine development." Logically, this means "more turbo sales" in the U.S. -- and more revenues for the turbo-charging specialists at BorgWarner.

"LazyEyedFreak" isn't the only investor bullish on BorgWarner's growth prospects, either. The Borg has already assimilated most of the biggest global automakers into its customer list already, providing diesel turbochargers and related fuel efficiency wares to car- and carparts-makers ranging from Audi to Ford (NYSE: F) to ZF Friedrichshafen. Knowing this, the consensus up on Wall Street is that BorgWarner will soon embark upon a five-year roadtrip of 19% annual earnings growth. That's better growth than is predicted for widely diversified rival Honeywell (NYSE: HON), and nearly as fast as analysts are expecting to see at the more automobile-focused Magna International (NYSE: MGA). It's almost enough to convince me that BorgWarner really is a buy, despite its 25 times P/E ratio.

Honestly, the only thing I really dislike about the stock is its price. From 2005 to 2009, the Borg did a good job of churning out cash -- about $800 million worth, or roughly $160 million per year. It's still doing OK in this regard, producing $262 million in free cash flow last year, for example. But with the stock now selling for $8.7 billion (even before you factor in debt), the valuation here just doesn't appeal to me. To justify this price, I'd want to see BorgWarner growing in excess of 30% per year -- a number even the most optimistic analysts hesitate to promise.

Just because I'm hesitant to recommend the stock, however, shouldn't stop you from considering it. Matter of fact, if you have taken a look at BorgWarner, and think there's more to this story than the numbers suggest, don't be shy -- pull up a soapbox. Climb up, and tell us why you like it.