The Top Stocks of 2012
The year’s big winners show signs of a rebounding economy.
6. Lennar Corporation
Opening price: $19.89. Dec. 26 price: $38.01.
Growth: 91 percent
Another homebuilder, Lennar is an even bigger company than Pulte though with a slightly less booming year. Homebuilders across the board had a strong year, re-enforcing the breadth of the housing recovery.
7. Marathon Petroleum
Opening price: $33.41. Dec. 26 price: $61.66.
Growth: 85 percent
Last year was all about growth in the oil and gas industry. This year has seen broader economic growth and a more diverse set of winners. But the technological innovation driving increased oil and gas production in the United States marches on. Marathon Petroleum was one of the biggest beneficiaries this year, especially since its summer 2011 spin-off of Marathon Oil left it focused exclusively on the booming refining and pipeline sectors.
8. Tesoro Corporation
Opening price: $24.47. Dec. 26 price: $43.34.
Growth: 77 percent
Tesoro is another energy player, an independent refinery and gas station operation headquartered in San Antonio, Texas. Its seven refineries in the western United States have benefitted from the combination of increased gasoline production and not-so-large increases in the country’s refining or crude oil export capacities.
9. Seagate Technology
Opening price: $16.40. Dec. 26 price: $30.38.
Growth: 85 percent
This company makes hard drives, which actually isn’t much of a booming sector because PC sales have stagnated in the face of the iPad and ever-smarter smartphones. The optimistic corporate line is that the strong year reflects successful reorganization after the return of former CEO Stephen Luczo. The more cynical take is that their main competitor, Western Digital, had a lot of factories destroyed by floods in Thailand. Lefty Gomez famously said he’d rather be lucky than good, and the same thing applies in the business world.
10. Gilead Sciences
Opening price: $41.86. Dec. 26 price: $72.48.
Growth: 73 percent
As a Handmaid’s Tale fan, I can’t help but feel this is a creepy name for a biotech company, but in many ways it’s the happiest story on our list. Gilead makes a number of drugs, including the influenza treatment Tamiflu and Cayston for cystic fibrosis. But its strong 2012 was driven primarily by the Food and Drug Administration’s approval of Gilead’s tenofovir/emtricitabine combination drug marketed as Truvada—the first prophylactic pharmaceutical shown to substantially reduce the risk of HIV infection among high-risk populations. This is good, old-fashioned, innovation-driven growth, where firms prosper by inventing useful new things.
This year clearly isn’t going to go down in the history books as the greatest year in American economic life. The unemployment rate was high, and most Americans’ earnings were flat. But the list of top-performing S&P 500 stocks shows unmistakable signs of an economy on the rebound. Players in housing, appliances, finance, and travel all benefited from a general return to economic normalcy with other standout performers scattered across sectors whenever they caught a lucky break. Not the best of times by any means but something like a normal time. If things get even better in 2013, expect to see fewer firms on the list that benefit from generic growth and more stand-out innovators driven to the top by new products rather than a simple increase in production.