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 76 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 Dec. 17 to March 16.

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 70 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 Feb. 18 to March 16.

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.

Goldcorp
Gold is the safe haven metal to which investors flock when they think times will turn bad. So in the wake of the Japan nuclear disaster, investors might wonder why gold prices tumbled and shares of Goldcorp, Yamana Gold (NYSE: AUY), and Barrick Gold (NYSE: ABX) traded down, just as things seemed to be getting worse.

The precious metal's value lies in its ability to offer liquidity, and that's exactly what investors needed in the aftermath of the quake, tsunami, and nuclear crisis. With gold prices now rebounding as Japan seems to get a handle on its woes, Goldcorp and the others can expect to profit handsomely, too.

Even before Japan's catastrophe, CAPS member bwachal thought the global situation put Goldcorp in an enviable position:

Mid-east turmoil, massive deficits/debt in the US, inflation in China. Investors looking for safe haven, this company can help provide it. They also just raised their monthly dividend=guaranteed return.

Put Goldcorp on your own watchlist, and see whether it can test even higher highs.

iGate
IT services provider iGate fell out of investors' good graces after news broke that it was raising money to buy India's Patni Computer Systems last November. Shares dove more than 20%, then tumbled again in January as the deal solidified. iGate rationalized the deal by saying it gave the company the scale to compete effectively against Cognizant Technology and Infosys (Nasdaq: INFY).

With shares now 30% below its November highs, the CAPS community expects iGate will beat the broad-market averages going forward. Let us know on the iGate CAPS page whether new forthcoming information will send shares higher.

MIPS Technology
Chip designer MIPS Technology has been scoring contract wins for a number of Android platform designs in the tablet computing and smartphone market. It says the current quarter will reveal its full panoply of deals with mobile computing partners, leading to a significant incursion on ARM Holdings' (Nasdaq: ARMH) territory. Analysts agree, recently upgrading the chipmaker in expectation that it will gain some market share from its rivals.

While Blizzardlover thinks someone might want to acquire MIPS soon enough, kleyau believes its licensing strategy is key to its future. In either case, head over to the MIPS Technology CAPS page and let us know how you think it stacks up against the indexes.

Three for free
Are these companies still good values, 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.