The Week's Top Stock Gainers

The week started off on a rocky note, with China sending some shockwaves through the markets by lowering its growth target for 2012 from 8% to 7.5%. From there, though, the good news largely took over. Though I'm not quite as confident as Nic Sarkozy that the eurozone's troubles are in the rearview mirror, Greece did take another step forward in its bid to avoid chaos by securing a historic debt swap with private investors. Meanwhile, in the U.S. we got more good news on the jobs front.

While the late-week good news helped major indexes avoid significant losses for the week, the end-of-week numbers were a mixed bag. The Dow Jones Industrial Average (INDEX: ^DJI  ) closed out the week with a 0.4% drop, but the broader Russell 3000 managed to eke out a 0.3% gain.

Top 3 Performing Sectors

Russell 3000 Sector

Weekly Price Change

Month-to-Date Price Change

Telecom Services 1.2% 1.9%
Consumer Discretionary 1% 1.6%
Utilities 0.8% 0.9%

Source: S&P Capital IQ. Weekly price change is March 2-March 9. Monthly price change is Feb. 29-March 9.

Over the past week, investors in Flagstar Bancorp (NYSE: FBC  ) didn't have to do much except hold on tight and enjoy the ride. Despite the absence of news for the bank, shares shot up 41% for the week. Should this rip-roaring spike put Flagstar on your radar? Probably not. Currently trading at just over $1, this stock is in the sweet spot for small-time day traders -- otherwise known as the adrenaline junkies of the stock market. Looking beyond the stock to the bank behind it, the numbers -- whether we're talking profitability (which is nonexistent), loan book, capital base, or any number of other key bank metrics -- look pretty horrid.

For Smith & Wesson (Nasdaq: SWHC  ) , the driver of the stock's gains was much more obvious. On Thursday, the company announced quarterly results that thumped analysts' estimates. For the most recent quarter, the gun maker managed to reverse a prior-year loss to show investors $0.07 in adjusted per-share profit. Wall Street was expecting just $0.04. While that probably would have been enough to send shares skyward, management built on the optimism by boosting its full-year revenue forecast from a range of $385 million to $395 million to a range of $395 million to $400 million. Shares were up 23% Friday alone and gained nearly 36% for the week.

Top 3 Performing Russell 3000 Companies

Company

Weekly Price Change

Flagstar Bancorp 41.5%
Transcend Services 35.9%
Smith & Wesson 20.2%

Source: S&P Capital IQ. Weekly price change is March 2-March 9. Includes only companies with a market cap of $250 million or higher.

Joining in on the big gains during the week were Molycorp (NYSE: MCP  ) and Monster Worldwide (NYSE: MWW  ) .

When a company announces an acquisition, if there's a major move in that acquirer's stock, it's usually down. If the deal packs a big premium for the buyout, it's even more likely that investors will knock the buyer's stock. But apparently when we're talking about a hot-to-trot industry like rare-earth minerals, all of that is out the window. Molycorp's 26% gain for the week came as the rare-earth miner announced that it's purchasing rare-earth processor Neo Material Technologies and paying a 42% premium for the company. The trading action seems crazy to me, but my fellow Fool Sean Williams sees definite promise in the integration of the miner and processor.

And as long as we're on the topic of mergers and acquisitions, we can turn to Monster Worldwide. Monster's shares tacked on a heady 23% this week after the company told investors that it's hired a financial advisor to perform a "review of strategic alternatives." The latter phrase is Wall Street-speak that typically translates to "we're going to see whether anybody wants to buy us." My fellow Fool Rick Munarriz was quick to chime in with his view that Monster needs to "sell -- and sell soon." But to whom? Rick thinks dot-com hotshot LinkedIn could make a very logical buyer.

That's it for this week's top-performers recap. If you're looking for some ideas for strong outperformers for the rest of year, The Motley Fool has created a brand new free report titled "The Motley Fool's Top Stock for 2012." In it, my fellow Fools reveal a top pick that's poised for explosive growth ahead. Get instant access -- it's free.

Motley Fool newsletter services have recommended buying shares of LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Matt Koppenheffer has no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter, @KoppTheFool, or on Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.


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  • Report this Comment On March 11, 2012, at 4:14 PM, stinkingcreek wrote:

    Be careful what you write about FBC. The CEO has started to buy shares on the open market.Also, WelsFargo and SunTrust are in need of a presence in the midwest. There is another bank out there also, CRBC. One if not both banks are takeover targets.

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