What separates the winners from the losers in the stock-picking game? Investors often win and lose for the same reasons as fantasy sports league participants. In fantasy sports, having a solid draft strategy will get you started on the best possible foundation. You need your top picks to be proven high scorers that are consistent, not prone to injury, supported by a stellar team, and possessed of a certain competitive edge. Similarly, portfolio-worthy stocks tend to possess a track record of increasing revenue and profit, strong balance sheets with little debt and plenty of cash, savvy and inspiring management, and that special something that separates them from the competition.

With these criteria in mind, let's talk about what your third and fourth round picks may be. You can find the first two rounds here.

Round 3: Under Armour (NYSE:UAA)
I have a slight bias toward this pick, as Under Armour is on my home team in Baltimore. I can bike to Under Armour's campus in Tide Point in about 15 minutes, and I can hang out with employees at the corner bars in Locust Point. I can tell you that much of the top talent coming out of universities in the region is going to work for Under Armour. The company's revenue has doubled to more than $2 billion over the past three years after taking 15 years to reach $1 billion. Following Under Armour's recent Q3 financial statements, we see that cash increased 19% to $186 million, while debt decreased from $72 million to $54 million, further strengthening the company's ability to spend on research and development or acquisitions while lowering interest costs.

UA Chart

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In Under Armour's recent financial release, founder, chairman, and CEO Kevin Plank said:

We have a consistent formula that is driving success across our business: deliver newness and innovation and the consumer responds. This has been instrumental in driving net revenue growth in excess of 20% for the past fourteen straight quarters and we will continue to fuel this strategy going forward.

Under Armour is quickly becoming a premier brand around the world, from expanding brand stores into China to partnering with Tottenham Hotspur of the Barclays Premier League. Even with all of the success, hype, and brand power, Plank has a famous motto in his office: "Don't forget to sell shirts and shoes." Under Armour's culture drives it to be an innovation machine, and one could say that it's in the business of apparel technology. This focus is its greatest advantage.

In November, Under Armour acquired MapMyFitness, which is currently the world's biggest digital fitness community. Under Armour has been at the forefront of wearable technology since it started selling shirts, and I think we will see big things coming out of its well-protected house in 2014.

Round 4: Discovery Communications (NASDAQ:DISCA)
Another of my hometown heroes, Discovery Communications, is an educational media and entertainment giant with more than 2 billion subscribers around the world. I, like many of you, grew up watching programs on the Discovery Channel and Animal Planet. Through my day job with an event production company in the Washington area, I have had the pleasure to be involved with a few of Discovery's yearly events where it shows off future programming to potential new channel partners and advertisers. I had never seen a higher level of technology than was deployed for these presentations, which were astonishing spectacles. Discovery's dedication to high-quality production was unmistakable. With a strong foothold in both the U.S. and international markets, Discovery's is a media brand whose competitive nature is fairly dominant and specialized. Competitors are typically mentioned in the same breath as "merger" or "acquisition."

Discovery Communications' leadership changed in 2007 to David Zaslav, who has overseen a transformation in the business. Discovery has doubled its investment in original content and pushed into new partnerships with Oprah Winfrey (through OWN), Hasbro (Hub networks), and Sony/IMAX (3net). TLC has remade itself into the largest female-targeted television brand in the world. Investigation Discovery, released in 2008, has become one of the fastest-growing cable networks in the world, revealing that viewers have an insatiable appetite for stories of violence and intrigue. Velocity is a new channel launched in 2011 that delivers male-centric programming centered around sports, autos, and live events. It is fully broadcast in HD and boasts around 52 million U.S. subscribers. Discovery has found the perfect recipe that television viewers cannot get enough of. Just rattling off some iconic shows makes this apparent: Deadliest Catch, Mythbusters, Planet Earth, How'd They Do It?, Whale Wars, etc.

But wait -- there's more!

Looking over the balance sheet, we see that at the end of Q3, Discovery holds $438 million in cash after spending $1.8 billion on acquisitions and investments while buying back $713 million in common stock. Those additional expenses for 2013 only decreased Discovery's cash horde by $762 million. In keeping with this cash flow train, we see that in Q3, free cash flow increased by 24%. It appears those big investments are already paying off. Although this only provides a snapshot of current earnings, I believe this is a company that will be strong for the long run, and in 15 to 20 years it will still be delivering results to shareholders. Check out Discovery Communications' quarterly corporate newsletter here.


DISCA data by YCharts.

If you're looking for investments that will dominate the competition and carry your portfolio to victory, then consider adding Under Armour and Discovery Communications to your roster. They look set to remain industry powerhouses for years to come.