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4 Stocks That Are Crushing the Market

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If you're trying to produce the best returns you can, nothing feels better than seeing the stocks you own jump out of the gate with a big pop. Think about it: with the right stocks, you could already have earned a full year's returns or more -- in just the first two weeks of 2012!

Of course, after stocks have already jumped, there's no guarantee they'll keep rising. But by taking a look at the companies that have put in the best performance in the opening trading sessions of the year, you may be able to get find some insight that will help you unearth the next big performers -- before they post their big jumps.

Finding 2012's rocket stocks
Most investors are pretty pleased with the way 2012 has started out. The S&P 500 (INDEX: ^GSPC  ) has gotten off on the right foot, jumping almost 3% so far this year. To put that in perspective, that figure far eclipses its total return for the entire 2011 year.

But if you look more closely, you'll discover many stocks that have put in much more impressive gains than that. In order to pinpoint the most exciting stocks, I looked for the S&P 500 companies that topped the gainer list in the first 10 days of 2012. Here they are:

1. Netflix (Nasdaq: NFLX  ) -- up 38.3%
The leader without a doubt is streaming sensation Netflix. After a catastrophic collapse in the second half of 2011, Netflix has come back with a vengeance.

A couple reasons explain the move. First, some speculate that a takeover bid from a company like Yahoo! would be the ideal resolution to both companies' problems. Others note that Netflix continues its plan to dominate the world, bringing streaming to the U.K. and Ireland and starting a price war with Amazon.com. The point isn't that Netflix is guaranteed victory -- only that it hasn't already admitted defeat.

2. Denbury Resources (NYSE: DNR  ) -- up 19.7%
Denbury is one of the players in the lucrative Bakken shale area of North Dakota. The stock jumped amid a general rise in the sector to start off 2012, as oil prices got back above the $100 per barrel mark. Then late last week, the company got a big upgrade from Raymond James, setting a $22 price target on the stock.

Denbury's main asset is its use of carbon dioxide in a process called tertiary recovery. That allows the company to get to oil left behind by earlier drillers -- a valuable process for old wells east of the Mississippi. As long as energy prices are high enough to justify such measures, Denbury can reap profits.

3. Bank of America (NYSE: BAC  ) -- up 19.2%
Financial stocks got crushed last year, and few more than Bank of America. Between the need to sell substantial assets to raise capital, a big cash infusion from Warren Buffett, and fears of sovereign debt problems in Europe, B of A didn't instill much confidence in investors last year.

But now, B of A has been on the rebound. With new signs of a recovering economy, the bank is in a position to benefit from a bounce in home prices and other asset valuations. That in turn could alleviate capital reserve concerns, opening the door to a potential increase in its dividend. In time, getting back to normal is exactly what B of A wants -- and it looks like the stock may be part of the way home.

4. Life Technologies (Nasdaq: LIFE  ) -- up 18.7%
The human genome has fascinated scientists and investors for years. And Life Technologies just released a $149,000 machine, the Benchtop Ion Proton Sequencer, that purports to break the $1,000 barrier for sequencing in a single day.

What that will mean for the company remains to be seen. But big advances in technology always stir speculation -- and if Life Technologies can monetize its new device, the potential could be almost limitless.

Start your 2012 on the right foot
Don't take this as an invitation to blindly jump into these shares now. But what you should learn from looking at these stocks is that opportunities abound in any market -- whether they come from beaten-down value plays, promising new innovators, or old-school companies. Keep your eyes out for them, and you'll find gains like these for yourself.

We've got one more place you might want to look for a great stock. Thousands have already read our latest Motley Fool new special report, where we reveal our top stock pick for 2012. It's free, but only for a limited time -- so check it out now.

Fool contributor Dan Caplinger usually starts on his left foot for some reason. You can follow him on Twitter here. He doesn't own shares of the companies mentioned in this article. The Motley Fool owns shares of Denbury Resources and Bank of America. Motley Fool newsletter services have recommended buying shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy stands on both feet.


Read/Post Comments (2) | Recommend This Article (14)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 11, 2012, at 1:41 PM, vangorilla wrote:

    Personalized medicine, cloud computing, digital rights are just some of the examples of investing trends that are starting.

    To see how to spot trends and the big stocks in them, http://www.bigstocks.com

  • Report this Comment On January 11, 2012, at 10:54 PM, neamakri wrote:

    LIFE sounded interesting so I looked up its "Company Description". Sorry, cannot pronounce most of the big words, let alone figure out what they are doing...sorry, not what I invest in (nor does Buffett).

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Dan Caplinger
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Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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Related Tickers

12/19/2014 4:39 PM
^GSPC $2070.65 Up +9.42 +0.46%
S&P 500 INDEX CAPS Rating: No stars
BAC $17.62 Up +0.09 +0.51%
Bank of America CAPS Rating: ****
DNR $8.32 Up +1.00 +13.66%
Denbury Resources CAPS Rating: ****
LIFE.DL $0.00 Down +0.00 +0.00%
Life Technologies… CAPS Rating: ***
NFLX $340.12 Up +5.70 +1.70%
Netflix CAPS Rating: **

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