5 Stocks That Just Won't Quit

In my weekly Fool column "Get Ready for the Fall," I run Nasdaq.com's 52-week highs list through the "wisdom of crowds" meter we call Motley Fool CAPS. The result: a list of stocks that have flown so high, investors are starting to get nervous about that whole "gravity" thing. But while many stocks will indeed plunge back to Earth, some seem immune to gravity, steadily riding a rising megatrend to ever-greater heights.

Today, we'll move beyond stocks that have hit 52-week highs, and identify companies now surpassing five solid years of outperformance. Which of these will thrash the market averages for another half-decade? Here are this week's leading contenders:

Companies are selected from the "New 5-Year Highs" list published on MSN Money on Monday. CAPS ratings from Motley Fool CAPS.

Each of the five stocks named above has just crested a five-year high, but if you ask the 145,000 (and counting) investors on Motley Fool CAPS, they're not done running. We're pretty excited about them, too, because today's list of five-year high-hitters features a pair of Motley Fool Stock Advisor recommendations -- Marvel (destined to disappear into Disney (NYSE:DIS) shortly) and MedcoHealth.

Oh, and did I mention that we've also got a pick from Motley Fool Rule Breakers here? Its name is FactSet Research, and it's this week's top stock.

The bull case for FactSet Research
It took our Rule Breakers team until late 2009 to discover FactSet. But as far back as mid-2008, CAPS member TinMar2050 had already spotlighted this stock as a "[s]mall but well managed company in the information management industry. Will continue to grow with financial professional's need for accurate historical information about companies."

All-Star investor coryjobe soon agreed, telling us in May about how this company "combines more than 500 data sets, including content regarding ten of thousands of companies and securities from major markets across the globe... into a single powerful online platform of information and analytics. Even though FactSet's average subscription value and number of users have been hurt by the economy and bad financial markets they are still increasing revenue."

Which doesn't surprise CAPS member Quihote, who points out that FactSet has actually posted "sales growth [of] 20-25% for last five years, excellent cash flow, profit margins, flow ratio."

This FactSet doesn't add up
Generating 20% to 25% growth, in good times and bad, is a feat to envy. I'll bet rivals like Thomson Reuters and Dow Jones (the News Corp (NASDAQ:NWS) subsidiary) do get a bit green-eyed over FactSet. While it's hard to say how Dow Jones is doing now that it's been absorbed into the Murdoch Empire, Thomson Reuters, at least, has seen its year-over-year revenue decline in the most recent quarter, even as FactSet keeps growing.

Alas, FactSet isn't growing fast enough to justify the stock's price tag. At a sale price of more than 25 times trailing earnings and close to 20 times free cash flow, I'd want some assurance that FactSet can keep growing at its 20% to 25% pace of yesteryear before I'd consider the stock "fairly valued." Unfortunately, if you ask the several analysts who follow this stock what they think is likely, they'll tell you that FactSet probably won't be able to post more than 15% annual growth over the next five years. To me, that's too slow.

Foolish takeaway
Now don't get me wrong. FactSet was a great buy when our Rule Breakers team recommended it in August -- but that was four months and $20-a-share ago. While I'd love to be able to tell you that, even after rising some 40%, this stock's run is just beginning, and that it "won't quit" for some time now, the numbers here simply tell me otherwise.

Of course, that's just my opinion. The facts may be clear, but the conclusions we draw from them are always open to interpretation. So here's your chance to tell us what you think about FactSet. Fire away.

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