Inside Wall Street: The Column's Top Winners and Losers for 2010's First Half

Gene Marcial's Inside Wall Street
Gene Marcial's Inside Wall Street

The year that just ended reminds me of 2003, when investors felt it was finally safe to start come out of hiding. Up to that point, investors were stuffing their unopened account statements in a drawer and trying to ignore the market after three years of coping with the mayhem and devastation of the Sept. 11 tragedy.

Fortunately, no crisis of such magnitude has occurred since. But the financial meltdown and the housing market collapse were enough to again scare investors -- and drive them out of the market. But the pain and fear started abating in 2010, and suddenly the stock market is again being regarded by some as a friend.

Still, the market remains a burdensome challenge for investors -- as well as a boon, nonetheless, for the risk-oriented. That was true in 2010, when early in the year the market appeared fraught with danger as the recession threatened to hang around for some time. But for the intrepid, it was a welcome stage for value-hunting at depressed stock prices.

What the Nation Hankered For

In many ways the companies featured in this column last year reflected such awareness for values and risks as the market encountered tremendous economic distress and business dislocations. The stocks that topped the list of winners displayed investors' consciousness of what the nation hankered for and what seemed to be logical bets in an economy faced with critical choices.

Spearheading Inside Wall Street's top-five gainers from the first six months of 2010 (a period chosen to give the stocks enough time to post meaningful performance records) were United Armour (UA), whose stock advanced 69.79% during the period; GT Solar (SOLR), which jumped 66.20%; Ford Motor (F), whose recovery pushed up its stock by 52.63%; PepsiCo (PEP), which climbed 50.95%; and Limited Brands (LTD), whose shares spirited up 48.77%.

Interestingly, the top losers are biotech stocks that analysts now expect to do much better in 2011, along with shares of housing companies that are also seen recovering this year.

Skin-Tight Yet Practical

United Armour reflected the craze not only for fitness but the demand for the right apparel and body-hugging wear for the gym and for outdoor sports and athletic activity. The company designs and makes a line of performance clothes and footwear made of synthetic microfibers for both men and women. United Armour is credited with inventing so-called "compression" tight-fitting apparel. These clothes appeal to active people who crave garments that help regulate body temperature by absorbing perspiration to enhance comfort, mobility and performance.

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When I featured the stock on May 28, it was trading at $34 a share, and by the end of November had bolted to $57.73. Its 52-week high is $60.14. Analysts describe United Armour's stock chart's ascent as "very impressive" and say it foretells more upward momentum ahead.

GT Solar is in a tough business, of which one of the biggest challenges is high production costs. In fact, the solar play on Wall Street is no longer heating up as it once did, but GT Solar continues to exceed analysts' sales and earnings forecasts. One problem for GT Solar is that it gets lumped with makers of solar panels that face strong competitive pricing. GT Solar's main focus, however, is in making the equipment and providing services that help bring down costs in the price-sensitive solar industry.

When I featured GT Solar in this column on Mar. 29, 2010, the stock was trading at $5.35. In six months, it had advanced to more than $8, and on Jan. 14, 2011, it closed at $10.75. The company's technology and equipment are essential for the production of polysilicon and multicrystalline ingots that are key materials in making solar cells and panels.

Laggards in the Lot

Ford continues to be an astonishing recovery play in the once-scorned auto industry. I first wrote about Ford in February when it was trading at $11 a share. It ran up to $15 in no time, but profit-taking took its toll and by June the stock had scaled back to $12.

I knew Ford was destined for better times with its new management and the promise of an economic recovery, so I wrote about the stock again on June 16, when it had dropped back down to $11. The price rallied since then and hit $16 six months later. On Jan. 14, Ford's stock drove up some more and closed at $18.65.

Still, not many can do what Ford has done, and surely there will always be losers in the lot. The column's five biggest six-month laggards are Canadian biotech outfit Resverlogix (RVXCF), which dropped to $2.64 a share from $6; ITT Educational Services (ESI), which fell to $53 a share from $95; low-fat milk producer Smart Balance (SMBL) which declined to $3.82 from $6; Addus Homecare (ADUS), down to $3.97 from $6; and Solgenix (SNGX), a bio-defense play, whose stock swooned 37%.

Again, this column focuses on stocks on the cusp of breaking out because of, say, the launch of a potentially hot product or the likely approval of a promising new drug. Or the stock may simply be dirt cheap according to the pros and be ripe for a takeover. In sum, it pays to pay attention to all manner of market opportunities. I'll be back later in 2011 with a look at the best and worst picks for the second half of 2010.

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