Ever since gold, silver and oil prices took a nasty spill last week, the Street has been abuzz with speculation that the commodities bubble may finally have popped.
A dismal U.S. jobs report showing new claims for unemployment benefits up by 43,000 probably shoulders some of the blame for the tumble. But it's likely that oil prices also reacted to higher than expected inventory, and disappointingly low factory orders in Germany.
Adding insult to injury, the emergence of signs pointing toward an economic slowdown in BRIC powerhouses China and India -- both countries recently raised interest rates to curb consumption and runaway inflation.
Which means that we may be in for "a bit of a ride," according to Matthew Nelson, a trader at Spreadex.
"With silver falling around 30% from recent all-time highs, and all other metals following a similar path due to global demand fears, traders are concerned about the near-term growth prospects of companies."
Patrick Connolly of AWD Chase de Vere seconds this opinion, positing that, "while the long-term outlook for commodities remains fairly positive, investors must be prepared to accept high levels of volatility and potentially significant short-term losses."
In the wake of a commodities crash, which companies will be able to weather the storm -- and even turn a profit off of it?
To help you find ideas, we went back in time, and identified a list of about 400 companies that outperformed the S&P 500 during the most recent commodity bubble crash, which occurred between June 2008 - February 2009.
We narrowed down the list by only focusing on companies that have been dumped by institutional investors over the current quarter.
Big money managers may be betting against these names -- but considering the track record of these companies under past market conditions that mirror's today's commodity pullback, are these companies being underestimated? (To access free, interactive tools to analyze these ideas, click here.)
List sorted by the size of relative institutional selling. (Note: All price data reflects changes between June 2008 - February 2009).
1. Strayer Education (Nasdaq: STRA): Education & Training Services Industry. During the current quarter, institutional investors were net sellers of 2.8M shares, which represents about 23.31% of the company's float of 12.01M shares. During the most recent commodity bubble crash, the stock's price changed from $199.9 to $216.43 (a price return of 8.27%, outperforming the S&P 500 index by 49.29%).
2. O'Reilly Automotive (Nasdaq: ORLY): Auto Parts Stores Industry. During the current quarter, institutional investors were net sellers of 23.3M shares, which represents about 17.09% of the company's float of 136.32M shares. During the most recent commodity bubble crash, the stock's price changed from $26.15 to $29.07 (a price return of 11.17%, outperforming the S&P 500 index by 52.19%).
3. Family Dollar Stores (NYSE: FDO): Discount, Variety Stores Industry. During the current quarter, institutional investors were net sellers of 12.7M shares, which represents about 12.46% of the company's float of 101.95M shares. During the most recent commodity bubble crash, the stock's price changed from $21.4 to $27.77 (a price return of 29.77%, outperforming the S&P 500 index by 70.79%).
4. ITT Educational Services (NYSE: ESI): Education & Training Services Industry. During the current quarter, institutional investors were net sellers of 2.3M shares, which represents about 10.29% of the company's float of 22.35M shares. During the most recent commodity bubble crash, the stock's price changed from $72.63 to $122.51 (a price return of 68.68%, outperforming the S&P 500 index by 109.7%).
5. Thoratec (Nasdaq: THOR): Medical Instruments & Supplies Industry. During the current quarter, institutional investors were net sellers of 5.5M shares, which represents about 9.41% of the company's float of 58.44M shares. During the most recent commodity bubble crash, the stock's price changed from $16.53 to $28.97 (a price return of 75.26%, outperforming the S&P 500 index by 116.28%).
6. Myriad Genetics (Nasdaq: MYGN): Research Services Industry. During the current quarter, institutional investors were net sellers of 8.3M shares, which represents about 9.31% of the company's float of 89.18M shares. During the most recent commodity bubble crash, the stock's price changed from $48.42 to $74.57 (a price return of 54.01%, outperforming the S&P 500 index by 95.03%).
7. Athenahealth (Nasdaq: ATHN): Business Services Industry. During the current quarter, institutional investors were net sellers of 2.9M shares, which represents about 8.5% of the company's float of 34.13M shares. During the most recent commodity bubble crash, the stock's price changed from $31.67 to $36.08 (a price return of 13.92%, outperforming the S&P 500 index by 54.95%).
8. Pegasystems (Nasdaq: PEGA): Business Software & Services Industry. During the current quarter, institutional investors were net sellers of 1.3M shares, which represents about 7.81% of the company's float of 16.64M shares. During the most recent commodity bubble crash, the stock's price changed from $12.32 to $13.57 (a price return of 10.15%, outperforming the S&P 500 index by 51.17%).
9. 99 Cents Only Store (NYSE: NDN): Discount, Variety Stores Industry. During the current quarter, institutional investors were net sellers of 3.2M shares, which represents about 6.85% of the company's float of 46.72M shares. During the most recent commodity bubble crash, the stock's price changed from $8.37 to $8.38 (a price return of 0.12%, outperforming the S&P 500 index by 41.14%).
10. Lincare Holdings (Nasdaq: LNCR): Home Health Care Industry. During the current quarter, institutional investors were net sellers of 5.7M shares, which represents about 6.78% of the company's float of 84.13M shares. During the most recent commodity bubble crash, the stock's price changed from $26.06 to $24.05 (a price return of -7.71%, outperforming the S&P 500 index by 33.31%).
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.
Kapitall's Eben Esterhuizen does not own shares of any companies mentioned.
