Anyone who feels as though there’s been no way to make money in the stock market this year hasn’t heard of Emergent BioSolutions. While broad indexes are off some 40% since Jan. 1, Emergent, which makes anthrax vaccines and is broadening into flu shots, is up 376%, to $24.11. Emergent is the top-returning stock in 2008 (through Dec. 12), according to an analysis done for TIME by Thomson Reuters Datastream. And Emergent isn’t the only company that’s been pleasing shareholders. This probably isn’t going to make you feel any better about your brokerage account, but in the Russell 3,000, a broad-based index that captures 98% of equities traded in the U.S., 152 stocks were up at least 10% through Dec. 12, and 60 stocks were up 30% or more. (See pictures of the global financial crisis.)
What has been the best way to make money in 2008? In a word: health care. Big percentage gainers include Idenix Pharmaceuticals, a maker of hepatitis and HIV treatments (up 122%, to $5.99); Thoratec, a developer of therapies for heart disease (up 60%, to $29.16); Almost Family, a home-health-care services provider (up 132%, to $45.10); and Sequenom, which does genetic testing (up 93%, to $18.45). Some larger-cap players are also up significantly, if not quite as spectacularly: Barr Pharmaceuticals has gained 23%, and Amgen 25%.
That’s not to say every drug-related company has been bulletproof, however. PharmaNet, an outfit that runs drug trials for biotech and pharmaceutical companies, has seen its cancellation rate spike because of drug discontinuations and mergers. Its stock is down 98%, to $0.74.
Among the top-tier performers are also, perhaps surprisingly, a number of banks. While it’s true that plenty of finance firms have been absolutely clobbered — worst of all, nationalized housing giants Fannie Mae (down 98%, to $0.70) and Freddie Mac (down 98%, to $0.74); insurers AIG (down 97%, to $1.80) and Ambac (down 95%, to $1.38); and brokerage MF Global (down 94%, to $1.96) — operators of smaller, community banks that ostensibly didn’t get caught up in so much mortgage-related fancy footwork have often thrived. Among them: Capitol Federal Financial in Kansas (up 41%, to $43.65), Tompkins Financial in New York (up 34%, to $52.00), First Financial Bankshares in Texas (up 41%, to $52.97) and TowneBank in Virginia (up 35%, to $21.69). Two of the year’s top gainers have been middle-market investment bank Broadpoint Securities Group (up 144%, to $2.88) and insurance-claims adjuster Crawford & Co. (up 196%, to $12.30).
Retail, a sector battered by the slowing economy and consumer spending, presents a similarly nuanced picture. Among the most brutalized have been rubber-shoe maker Crocs (down 96%, to $1.52), bookseller Borders (down 93%, to $0.71), home furnisher Pier 1 Imports (down 90%, to $0.51) and casual eatery Ruby Tuesday (down 86%, to $1.38). But there have been standouts too. Some are thrift-conscious companies that make for classic recession plays: Dollar Tree (up 61%, to $41.61), 99 Cents Only Stores (up 39%, to $11.05), Family Dollar (up 27%, to $24.51) and Wal-Mart (up 15%, to $54.63). Others, though, are less predictable, including shoe chain Finish Line (up 134%, to $5.66), teen clothier Hot Topic (up 33%, to $7.73), and sandwich shop Panera Bread (up 41%, to $50.50).
One of the odder realities found by digging beyond broad categories of companies is that a number of firms related to the housing market have been doing quite well this year. Trex Company, which makes decking and railing out of reclaimed plastic and waste wood, is up 69%, to $14.35. Beacon Roofing Supply, which sells roofs for homes and commercial buildings, has seen its stock jump 52%, to $12.76.
The unfortunate thing about looking at top performers — besides going back to look at your own statements — is that by the time a company is on fire, the smart money is probably on the way out. As they like to say in the investing business, past performance is no guarantee of future results. All you have to do it take a look at some of last year’s biggest percentage gainers to understand that. Solar-panel maker First Solar, which rose more than 700% last year, has lost more than half its value so far in 2008. Fertilizer manufacturer Mosaic, which last year saw its stock triple amid the commodities boom, is down 67% since January, as boom has morphed into bust. Chasing winners is rarely the best way to make money — though it is nice to know there are at least winners out there to be found.
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Read “Four Steps to Ending the Foreclosure Crisis.”
