Ask a cheapskate value investor to buy a stock that's achieved a new 52-week high and you'll get one of two responses:

  1. Hysterical laughter.
  2. Sudden nausea.

Pity them, Fool.

How many times has NVIDIA (NASDAQ:NVDA) touched a new 52-week high on its way to becoming a four-bagger in two-and-a-half years? Too many to count, of course.

Let that be a lesson. Rocket stocks -- that is, high-growth stocks enjoying heavy price appreciation -- are sometimes worth buying.

Rocket stocks, not rocket science
And sometimes they're worth buying in bulk. Think of Baidu.com. My buddy Rick Munarriz recommended China's top search engine to our Rule Breakers subscribers at $83.37 in October of last year.

I thought he was nuts. I mean it. The stock was both expensive and on a tear. So, I argued against buying it in a January duel here at Fool.com. Now Baidu is a four-bagger. How I wish I had listened to what Rick was telling me those months ago.

Don't do as I did. Never assume an expensive stock is too expensive. What looks like a cliff could really be base camp on a climb towards the summit of Everest. Each day in this column, with the help of the 76,000 pro and amateur stock pickers in our Motley Fool CAPS community, we'll seek to find those still climbing.

Our candidates will be found daily in the 52-week high lists at The Wall Street Journal. But few high-fliers will make the cut; we're looking for stocks expected to boost net income by at least 15% annually over the next five years, and which earn at least two of five stars from our CAPS contingent.

Here are today's candidates for your consideration:

Company

Closing Price

CAPS Rating (5 max)

5-Year Growth Estimate

52-Week Range

Amphenol (NYSE:APH)

$46.51

****

19.3%

$30.61-$46.66

Diamond Offshore (NYSE:DO)

$128.03

*****

21.8%

$73.50-$128.82

UnitedHealth Group (NYSE:UNH)

$57.87

*****

15.0%

$45.82-$57.95

Respironics (NASDAQ:RESP)

$51.56

*****

15.5%

$36.94-$51.77

Sigma Designs (NASDAQ:SIGM)

$72.17

*****

29.3%

$19.77-$73.00

Sources: The Wall Street Journal, Yahoo! Finance, Motley Fool CAPS.

Often, the screen turns up mostly small caps, featuring some promising though speculative stocks. The tiny titans can create astounding returns if bought before they get discovered. Witness medical device maker Respironics, which has climbed more than 35% over the past 52 weeks. That easily bests the S&P 500's 7.5% return over the same period.

No stigma for Sigma Designs
But I also wonder if Respironics is at (or slightly beyond) fair value. After all, few firms in its industry sport such a high Price/Sales figure (three times) as Respironics does. (ResMed is a notable exception; it comes in at five times.)

Then again, great stocks can be like that. My top choice today, chipmaker Sigma Designs, offers ample proof. Though the stock was trading for 67 times trailing earnings at the time of David Gardner's recommendation in Rule Breakers late last summer, it has more than doubled since.

And I see the possibility of further gains. IPTV, which is code-speak for bringing Internet signals and content to your television, is a massive growth business that's attracting no less than AT&T (NYSE:T) to its bandwagon. Sigma Designs makes chips that give life to set-top boxes that deliver IPTV signals.

Here's why that matters. Analysts at Multimedia Research Group (MRG) estimate that global IPTV subscribers will increase from 13.5 million this year to 72.6 million in 2011, a compound annual growth rate of 52%.

Notice the incongruity. Wall Street expects Sigma to grow at just 29% annually, yet the industry it serves, and which is responsible for roughly 70% of its revenue, is expected to grow 52% annually.

Thus, I believe Sigma's PEG of 1 is probably lowballing it.

But that's my take. What's yours? Would you buy Sigma Designs at today's prices? Let us know by signing up for CAPS now. It's 100% free to participate.

I'll be back tomorrow with more rocket stocks.

Fool contributor Tim Beyers, ranked 8,526 out of more than 76,000 participants in CAPS, didn't own shares in any of the companies mentioned in this article at the time of publication. Find Tim's portfolio here and his latest blog commentary here. Baidu.com and Sigma Designs are Rule Breakers picks. NVIDIA and UnitedHealth are Stock Advisor selections. United Health is also an Inside Value choice. The Motley Fool's disclosure policy is saving up for a ticket to the moon, Alice.