With 2007 coming to a close, you'll be seeing a lot of lists detailing the year's biggest winners and losers. CNNMoney decided to jump the gun and be fashionably early, digging into the components of several popular indices to determine the early victors.
I was skimming the article, and had to rub my eyes when I came across the list of the top performers within the weighted Nasdaq 100 index.
|
2007 |
|
|---|---|
|
Baidu.com |
231% |
|
Intuitive Surgical |
221% |
|
Foster Wheeler |
176% |
|
Research In Motion |
136% |
|
Amazon.com |
120% |
Can you believe it? The two top dogs are active Rule Breakers recommendations. And I'm not talking about last-minute scorecard additions for the sake of abhorrent window-dressing. The growth-stock newsletter recommended Intuitive Surgical at a much lower price. Shares of the company behind the revolutionary da Vinci robotic arm, which is assisting in surgical procedures in more and more hospital operating rooms, have soared 628% higher since David Gardner singled out the company in spring 2005.
I was the one who recommended Baidu to subscribers 14 months ago. The stock has catapulted 360% higher in that time.
Beyond the Breakers
We're not perfect. We didn't hop on Foster Wheeler. The industrial contractor and power-equipment supplier has had an amazing run in our absence. I also have to kick myself for missing out on Research In Motion. All year long, I figured that the iPhone and the vaporware Gphone would come to eat at the company's BlackBerry workhorse. It turns out that folks are using Apple's
As for Amazon, it's probably too big to be considered for the growth-stock service, though David has been singing the leading e-tailer's praises for years as a Motley Fool Stock Advisor selection.
Still, it's hard to resist jockeying for bragging rights when three of the biggest stars among the Nasdaq exchange's 100 beefiest players are newsletter recommendations.
Scoring a 100
What's that? You feel that Baidu should be booted from the list because it only got added to the index earlier this month? It's a fair point. Apparently the major indices aren't beyond a little window-dressing themselves, in the form of annual re-rankings in December.
However, numbers do not lie. All five of these stocks came through with fantastic years, and investors should pay attention. Figuring out the catalysts that propelled these shares higher will make it that much easier to spot the 2008 winners early.
On the surface, it's hard to tie them all together. You would probably never find an engineering contractor, a robotic surgeon, and a Chinese online search expert at the same party. I can't even fathom the icebreaker that would be required to get that soiree swinging.
Want to know what all five companies do have in common? They have proven histories of topping the market's profit expectations. Intuitive Surgical and Amazon have beaten Wall Street's bottom-line targets in each of the past four quarters. Baidu, Foster Wheeler, and Research In Motion have lapped analysts in three of their past four quarters.
Collectively, the five winners have beaten earnings estimates in 17 of the past 20 quarters. And what's really impressive here is that they aren't just managing expectations to come in a penny or two ahead of the crowd. They are obliterating those targets.
And this isn't even rocket science. Intuitive Surgical has now blown past net income estimates for 20 straight quarters. I find myself writing the same quarterly recap every three months, just tacking on one more number to the end of the market-humbling streak.
This doesn't mean the list of the Nasdaq 100's biggest winners for 2008 will be a carbon copy of this year's list. I'm just suggesting that if it does somehow happen, you shouldn't be surprised.
Like the New England Patriots this year, until proven mortal, winners keep on winning.
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