The market's freshman quarter was a good one. The S&P 500 soared 12% during the first three months of 2012, and the tech-heavy Nasdaq managed a nearly 19% spurt. Investors won't look a gift quarter in the mouth: Over that period, these two indices far outperformed what they've historically averaged for an entire year.
The quarter was so strong that there are even a handful of companies (and one fund) that saw their share prices more than double through the past three months. Let's take a closer look at some of those winning investments from the three major market exchanges.
Firsthand Technology Value Fund (SVVC): +176%
Facebook's decision to go public has benefited this closed-end fund in a huge way in 2012.
Firsthand Technology Value began 2012 with 82% of its net asset value of $23.92 per share resting in cash, but it has been snapping up shares of Facebook from insiders and ex-employees who were cashing out on secondary market exchanges.
Firsthand now owns 600,000 shares. We may find out as soon as next month if it was the right move, since Facebook appears to be heading for a May IPO. The fund went from trading at a compelling discount to its asset value to a seemingly unsustainable premium during the quarter, but that will ultimately have to be decided by Facebook's performance.
Tudou (TUDO): +169%
China's second largest video-streaming website soared in March after agreeing to be acquired by its larger rival.
Youku (YOKU) agreed to exchange 1.595 of its American depositary shares for every single share of Tudou. The end result is that Youku was offering to buy Tudou at more than twice what the market felt that the website operator was worth.
Buyouts do take place at premiums, but you rarely see this kind of markup on a deal. However, Youku saw that Tudou was starting to catch up with it after a deal last year with Chinese micro-blogging platform Weibo.
Guidewire Software (GWRE): +137%
This provider of software solutions for property and casualty insurers wasn't even trading a year ago. The company went public in January at $13 a share.
There was plenty of buzz ahead of its debut, but Guidewire became the best performing IPO of the first quarter after posting better than expected quarterly results last month.
Investors should always pay attention to the first few quarters of recently public companies. Their performance then helps let the market know if the company has legs or if it was simply trying to go public as an exit strategy because its fundamentals were peaking.
Guidewire appears to be the real deal -- for now.
VIVUS (VVUS): +129% Obesity is a growingepidemic in this country, and there are several hungry biotechs hoping to drum up treatments. VIVUS is among them, with its drug Qnexa.
VIVUS scored a major victory when a Food and Drug Administration advisory panel recommended approval for Qnexa by a convincing 20-2 vote.
Amylin also recently received regulatory approval of Bydureon, a weekly version of its popular type 2 diabetes drug Byetta.
Sears Holdings (SHLD): +108%
The parent company behind Sears and Kmart has been a retail disappointment for years, but sometimes pessimism can be overdone.
Sears may never be great again, but it's learning to live with the hand that it has been dealt. It's closing down underperforming stores and may wind up selling Lands' End and some of the smaller concepts that it has acquired alone the way.
Value hounds also argue that there's a compelling real estate play here.
Carmike Cinemas (CKEC): +103% If it was unlikely for Sears stock to double over the past three months, imagine the odds against it happening for a multiplex operator.
You have to go back 16 years to find the last year when exhibitors sold as few movie tickets as they did in 2011. However, the outlook for 2012 is considerably rosier, and last month's debut of The Hunger Games delivered the third-strongest opening weekend in this country's theatrical history.
Banking on the next double
Even if the market has another strong three months don't expect any of these stocks to double again. An equity doubling in back-to-back quarters is extremely rare. However, if the market remains buoyant and the fundamentals of these investments remain intact, there's no reason why they can't continue to pad their gains over time.
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Motley Fool contributor Rick Munarriz does not owns shares in any of the stocks in this article.
6 Stocks and 1 Fund That Have Already Doubled This Year
Performance: up 27% (but still down 20% since the end of 2010).
Company profile: Owens-Illinois is the world's largest manufacturer of glass bottles, with operations in 21 countries.
Investor takeaway: For 2011, the company earned $2.37 per share versus $2.60 in 2010. However, it also took a $640 million charge for a variety of reasons in the quarter that resulted in a loss of $4.71 per share on a GAAP accounting basis. It is covered by two analysts, resulting in ratings of one "buy" and one "hold."
Performance: up 27% (but still down 23% since the end of 2010)
Company profile: Freeport-McMoRan's mines produce more copper and molybdenum than any other company in the world. It also produces gold.
Investor takeaway: Metals mining have historically been highly volatile. Analysts give Freeport-McMoRan eight "buys" and one "hold," according to Morningstar. Two weeks ago, the company reported that fourth-quarter net profit was $640 million, down from $1.5 billion in same period of 2010, but full-year earnings hit a record $4.6 billion.
Performance: up 29% (but still down 47% from year-end 2010)
Company profile: Bank of America is one of the largest financial institutions in the world, with lending operations in the consumer, small business, and corporate arenas as well as asset management and investment banking divisions. It just reported net income of $85 million, or 1 cent per share, for 2011, roughly in line with analysts' expectations.
Investor takeaway: The bank faces lots of challenges before it returns to solid fiscal health, but investors apparently think they can be met, given the share-price rise. It was trading at half of book value late last year, so investors may think it hit bottom.
Company profile: Eastman Chemical is a global producer of chemicals, plastics and fibers, with manufacturing sites in seven countries.
Investor takeaway: During January, the company announced the $4.7 billion acquisition of Solutia (SOA), another chemicals and plastics-making firm, which may have contributed to the price pop. Although it has a diverse international customer base, some of its biggest customers are in the cyclical auto and construction industries. S&P has it rated "buy" and its $60 price target is a 20% premium to the current price.
Company profile: LSI is a maker including of specialized circuits that support applications in enterprise storage and networking.
Investor takeaway: Although it reported a fourth-quarter loss two weeks ago, LSI gave an upbeat outlook for the current quarter, saying it expects revenue in the range of $550 million to $590 million, far ahead of analysts' $511 million, according to data from FactSet Research. S&P's review of analysts' ratings found six "buys," two "buy/holds," five "holds" and one "weak hold."
Performance: up 31% (but still down 66% from year-end 2010)
Company profile: First Solar manufactures solar modules and turnkey solar systems. It has a competitive advantage due to its technology.
Investor takeaway: The company likely got a boost when, late in January, the MidAmerican Energy unit of Warren Buffett's Berkshire Hathaway (BRK.B) said it has started a new company to oversee a variety of solar, wind and other renewable-energy projects. In December, MidAmerican said it would buy a $2 billion California solar farm from First Solar, lending support to the outlook for the whole industry.
Performance: up 39% (but still down 40% from year-end 2010)
Company profile: Sears Holdings is the parent to Sears, Sears Canada and Kmart stores and the fourth-largest retailer in the U.S.
Investor takeaway: This troubled stock rose on speculation that its primary shareholder, hedge fund manager Edward Lampert, may seek to take it private. Everything else seems to be going against Sears, including steadily declining earnings, but it does generate significant cash flow, which it has used to buy back shares and pay down debt. But a Morningstar analyst recently wrote that "we don't forecast much growth for Sears, but we do see the potential for a marginal improvement in operating results in 2013-2014 if the appliance market can rebound off current lows."
Company profile: Textron's wide-ranging business interests span the aerospace, defense, financial and industrial markets. Its Cessna is the leader in business jets, while its Bell unit is a popular maker of helicopters.
Investor takeaway: Textron is in many cyclical businesses and its defense sector is vulnerable to Congressional budget cutting. For 2012, its management is targeting an 11% improvement in sales, driven by further gains at Cessna and Bell, and $1.80 to $2 per share in earnings, about 35% to 50% higher than 2011's adjusted earnings. Since the end of 2010, its shares are up 8%.
Performance: up 77% (but it's still down 29% from the end of 2010).
Company profile: Netflix operates a fast-growing DVD rental and video streaming service and its customers are transitioning from DVDs to digital streaming content.
Investor takeaway: Down 60% in 2011 after gaining 219% in 2010, this stock is not for the faint of heart. Recent moves by the management team, specifically trying to raise rates by a huge amount, have added uncertainty to what is already a challenging market for the company as digital service takes over its industry