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


CAPS Rating 12/9/10

CAPS Rating 3/9/11


13-Week Performance

CKX ** *** 52.6%
Affymetrix ** *** 43.5%
Telenav ** *** 40.3%

Source: Motley Fool CAPS screener; trailing performance from March 11 to June 8.

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


CAPS Rating 3/9/11

CAPS Rating 6/8/11


4-Week Performance

PE Ratio

Air Transport Services Group (Nasdaq: ATSG) ** *** (13%) 12.3
Jefferies Group (NYSE: JEF) ** *** (7.7%) 15.7
CA Technologies (NYSE: CA) ** *** (3.3%) 13.8

Source: Motley Fool CAPS Screener; price return from May 13 to June 8.

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.

Air Transport Services Group
Considering the strong earnings performance from freight delivery specialists UTi Worldwide, UPS (NYSE: UPS), and FedEx (NYSE: FDX), the results posted last month by Air Transport Services Group were a real disappointment, and explain why shares are down by almost 15%, a greater percentage than its rivals.

However, a lot of the blame can be laid at the feet of its decision to replace its previous credit agreement with a new, lower-cost facility. It took some hefty charges from the change, but it's expected to allow it to meet its rate of return goals. That could be why 87% of the CAPS members rating the freight and logistics company believe it will beat the broad market averages.

You can deliver better understanding by expressing your views on the Air Transport Services Group CAPS page.

Jefferies Group
Wall Street analysts think the acquisition of Prudential Bache by investment banker Jefferies Group will cause it to underperform the markets, with Goldman Sachs (NYSE: GS) going as far as to reiterate its "sell" rating. Others see it lagging, too, but note that if interest rates rise, the Prudential acquisition could result in strongly rising revenues and profits for the unit.

Considering the failure of the Fed's second round of quantitative easing, there's talk that the central banker will have to do just that, raise rates. CAPS member polterziets says Jefferies has the right combination of assets to capitalize on the markets:

Great leadership, strong investment banking market share growth and size growth, hiring people away from bulge bracket banks. stronger market share in securities also since the bigger guys disappeared or consolidated.

Add Jefferies Group to the Fool's free portfolio tracker and see if it's a good investment in the future.

CA Technologies
IT software specialist CA Technologies hasn't offered investors much in the way of growth opportunities lately, with sales in the most recent quarter rising just 4%; only 2% of that was organic. Yet the security breach at Lockheed Martin, facilitated by compromised security tokens from EMC's (NYSE: EMC) RSA Security unit, could give it the necessary jolt. Reputations in the industry are hard to reconcile once tarnished, and some analysts feel RSA is damaged permanently by the incident.

It could be its prior slow-growth ways that has 30% of the CAPS members who rated CA Technologies thinking it would underperform the broad indexes, but now it may be able to capitalize on the misfortune of others.

Let us know on the CA Technologies CAPS page whether you think this remains a company with a secure future ahead of it.

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.