Tom Petty sings that even the losers get lucky sometimes, and that may help partly explain why many of the biggest sinkers of 2012 have been bouncing back in 2013.
Back in December I took a look at five stocks that should bounce back this year after a brutal 2012, and with just one exception they have certainly lived up to the billing.
Four of the five stocks have gone on climb at least 50% higher so far this year, and the average gain for all five companies is a hearty 58%.
Who are they? How did this happen? Let's dive right in.
| Company |
Dec. 31, 2012 |
July 15, 2013 |
Gain |
|---|---|---|---|
|
Groupon (GRPN +2.77%) |
$4.86 |
$8.44 |
74% |
|
Zynga (ZNGA +0.00%) |
$2.36 |
$3.55 |
50% |
|
Active Network (ACTV +0.00%) |
$4.91 |
$8.77 |
79% |
|
Hewlett-Packard (HPQ +2.88%) |
$14.25 |
$26.38 |
85% |
|
Baidu (BIDU 0.83%) |
$100.29 |
$101.59 |
1% |
Source: Yahoo! Finance.
The average gain of 58% in a little more than six months is pretty impressive.
Groupon plunged 76% last year, dogged by a faltering daily-deals model and a CEO who didn't seem professional enough by Wall Street's seasoned standards. Groupon did get a new helmsman, but its biggest triumph has been using its deep list of local merchants -- hundreds of thousands of them -- and offering them enterprise software solutions, credit card processing, and other logical services. It also bit the bullet with poorly performing overseas markets. The result is that Groupon is taking steps in the right direction these days. Analysts see revenue and earnings inching higher this year.
Zynga shed 75% of its value in 2012. The IPO that had no problem getting investors to buy into the social gaming leader at $10 a pop crashed into low single digits. Zynga still has problems. The company behind FarmVille and Words With Friends continues to post weak bookings. However, initiatives overseas for real-money wagering and its recent hire of Xbox's president to be its new CEO have turned heads. It also only helped that Zynga was trading dangerously close to its net cash value when the stock bottomed.
Active Network saw its shares fall 64% last year, but the leading provider of online registrations for triathlons, marathons, and other endurance events knows that winning investor confidence isn't a short sprint. Just like Groupon and Zynga, Active is another busted IPO after going public at $15 in 2011. Losses continue and top-line growth continues to decelerate, but the growing popularity of 5k runs and other endurance events finds Active in the right place at the right time. Wall Street's betting on Active turning profitable next year.
Hewlett-Packard investors were treated to a 45% haircut in 2012, and the climate isn't necessarily kinder in 2013. PC shipments have fallen for five consecutive quarters -- something that has never happened -- and there's little reason to believe that folks will trade back their tablets and smartphones for HP's desktops and laptops. However, with its largest domestic rival set to be taken private, HP is generating some healthy investor interest these days. Even after nearly doubling this year, HP is fetching a reasonable seven times this fiscal year's projected earnings.
Baidu only stumbled 14% last year, but it's also the only one of the five companies that hasn't moved higher by at least 50% this year. China's leading search engine has been flat in 2013, up a mere 1% after moving out of negative year-to-date territory yesterday. The upstart search engine that spooked Baidu after launching last summer is still gaining market share, but it's really just 15% of the market at a time when Baidu continues to command more than two-thirds of the country's queries.
The long road back
These five companies still have a long way to go. They are all trading lower than they did at the end of 2011. However, they're all at least moving in the right direction.
