The Hotties and the Notties

The huge boost of confidence that the financial sector received last Friday helped restore a sense of order to the market -- at least until Monday. This week has shown some uncertainty now that the Treasury has put details to its mother of all bailouts proposal. An anxious world waits to see whether political wrangling will undo the shaky foundations that have been shored up, but in the interim Regions Financial (NYSE:RF), continues to bank on poise in the aftermath.

The assets of the failed Integrity Bank were bestowed upon Regions Financial following the Fannie and Freddie bailouts, and with Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) resigned to no longer being investment banks, the potential for bad debt wiping out the markets seems to have been dramatically reduced.

The takeover of the mortgage giants earlier this month had CAPS member shaneconnerly seeing the recovery of Regions Financial (and banking interests in general) as being under way: "With FRE and FNM now in goverment controle....markets to rebound for banks...." The call may have been a tad premature, but shaneconnerly was ultimately proven correct; banks were the top-performing industry last week.

Here are the five best-performing industries of the past week, followed by the five worst.

Source: BigCharts.com

When you're hot, you're hot
Perhaps more surprising than the jump in financial stocks was the spike in companies in the recreational-products market. It might be obvious that investors in banks and mortgage companies would feel euphoric, but the reason behind an increase in RV makers like Winnebago (NYSE:WGO) and Thor Industries (NYSE:THO) is not so apparent, particularly when the sector is posting weak sales numbers.

Last month, CAPS member dexion10 came up with three reasons why the RV industry in general, and Winnebago in particular, was not a place he'd want to be putting any money right now:

WGO is thrice screwed:

1. Big ticket item at a time of weak consumer credit
2. Gas prices doubled in 1 yr
3. GE Finance pulled financing for RV's

Yet it's notable that, although analysts also remain bearish on the RV maker for many of the same reasons, the company was able to secure a $25 million credit facility that will provide it with greater flexibility during a time of tight credit.

When you're not, you're not
It should come as little shock to anyone that the nationalization of American International Group (NYSE:AIG) would lead the insurance industry down. CAPS member InvestorDeb views AIG as a call option with no expiration and notes that the insurer was not insolvent, only illiquid:

Another dominant, global franchise that has found itself ensnared in the vortex of the U.S. Financial Black Hole era... This is another call option with no expiry: it will either go to 0 or morph into another form of its prior self. I am under the belief that the latter is going to happen. Remember, LIQUIDITY is the issue here, NOT SOLVENCY... AIG has assets that are worth in excess of what the stock price is telling us... There is also a real possibility that some larger shareholders will look to buy some of those assets or block the sale of warrants to the U.S. Government, and figure out a way to pull this company out of the fires of financial hell. The risk / reward is compelling, and at > 0.5% of my entire portfolio, I will buy several thousand shares, right here, right now ...

Yet the fear of a worldwide financial collapse was so pervasive that securities and financial regulators around the world made moves to secure their own institutions. So while German insurer Allianz (NYSE:AZ) was also one of the big losers last week, shares have stabilized this week. Earlier this year, CAPS member SteelDog pointed to Allianz' long history and its exposure to various markets as reasons for thinking it would excel, although subsequent events have showed that distinguished histories mean little in today's new reality:

low PE, constant growth, nice dividend-can't miss; With more than 100 years of writing insurance in Europe, Allianz is a well-known and trusted brand. European governments are likely to privatize retirement savings, and Allianz is positioned to win a share of this business. Allianz bought out the minority interest of its Italian subsidiary (RAS), which gives it more exposure to the Italian market, its second-largest.

Hot or not?
Industries can run hot or cold, and cyclical ones can enjoy a long time in the sun followed by extended periods behind the clouds. You can start your own research on the stocks that comprise these industries on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page. Then let us know ... are they hot or not?