When the clock's ticking down and the game's on the line, which of your teammates do you trust to sink a winning shot? Sure, you could dish the rock to your resident superstar -- but what if he's playing ice-cold at the moment? So instead, you pass to the guy with the hot hand, the one who'll be deemed en fuego tomorrow on ESPN.
Momentum investors are looking for stocks in a similar state of sizzle. But momentum by itself will only get you so far. I prefer to find high-quality stocks that also have some positive inertia on their side. It's like kicking the ball out to your team's superstars when they do have a hot hand.
There's no doubt that now's a tough time to try and find winners out there, but to find the current league leaders, I ran a simple momentum screen on The Motley Fool's CAPS screener. Each of the companies below was up a double digit percentage over the past four weeks -- despite the S&P's loss -- and has been rated highly by CAPS players.
|
Stock |
Four Week Change |
12 Month Change |
CAPS Rating (Max 5) |
|---|---|---|---|
|
Barrick Gold |
41.3% |
(34.8%) |
***** |
|
Silver Standard Resources |
33.2% |
(77.9%) |
***** |
|
Newmont Mining |
32.2% |
(39.6%) |
**** |
|
Hansen Natural |
20.0% |
(38.2%) |
**** |
|
Under Armour |
19.4% |
(55.2%) |
**** |
Sources: Yahoo! Finance, CapitalIQ, and CAPS as of Nov. 24.
At first glance this sure looks like a high-quality group. But, as always, I highly advise taking a close look before you throw a bounce pass in the direction of any of these stocks. In fact, I'll even kick off your research with a look at Hansen Natural.
Providing the pep
The current market crash is enough to steal the fizz from just about any stock, but not all businesses have succumbed to the global slowdown yet. Specialty soda maker Hanson, for example, still had some pop left in its numbers when it reported its third quarter. The company's 14% net income growth didn't have the kind of pep that its historical results have had, but at a time when competitors like Jones Soda are coming to a screeching halt, double digit growth is nothing to scoff at.
Maybe more importantly, the Monster-powered company finished the quarter with a monster stash of cash -- cash equivalents and long-term investments together amounted to $380 million. That heap-o-green along with a complete lack of debt puts Hansen in a very good position to weather recessionary conditions.
Looking ahead
If Hansen's financial position gives it a solid foundation in a recessionary environment, its business does still provide some question marks. Giant beverage competitors like Pepsi
Still, the continued growth, the solid balance sheet, and a distribution deal with Coke do lend some credence to Hansen's current appeal. On CAPS the stock doesn’t have a perfect five star rating, but over 93% of the CAPS members that have rated the stock have come in on the positive side. CAPS All-Star DemonDoug likes the recession-ready balance sheet and recently quipped:
The answer: One with no debt.
The question: What kind of company is most likely to survive a severe downturn, even a depression, and possible U$ dollar deflation (and therefore beat the S&P 500)?
Looking at the business side of the equation, ringmaster9947 added: "Even though the market for energy drinks has diminished with recession. Hansen Natural has been able to keep sales up as well as introducing the product into Europe with the deal with Coke."
Fielding your team
So do you think any (or all!) of these companies deserve a place on your All-Star team? You can share your thoughts on it or check out more of what your fellow Fools had to say about it or any of the other stocks above by stopping by CAPS. And while you're there you can also take a peek at few more of the 5,400-plus other stocks that are rated on CAPS.
I think I heard a boo-yah somewhere out there -- thanks Stuart Scott!
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