Movies aside, you don't see underdog comebacks too often. But the stock market is another story. There are easily dozens of public companies -- even widely followed ones -- that investors give up on each year, only to see them come surging back.
In December I highlighted three such stocks from 2012: Green Mountain Coffee Roasters, Facebook, and GameStop (NYSE:GME). Each had sent shareholders running for the exits at some point in the year, but finished with gains of more than 60%. That run has kept up into 2013 for two of the three. While Facebook is running even, Green Mountain and GameStop are up by more than 70%.
This year is only half done, but the stock swings are already piling up. Here are three of the biggest comebacks so far.
Netflix (NASDAQ:NFLX) started the year at less than $100 a share. That was before it announced a huge fourth quarter that sent the stock soaring toward a 200% return over the last 52 weeks. Despite worries about rising content spending and a new debt offering's potential as a "red flag," Netflix hasn't looked back.
That's mainly thanks to the streamer's successful gamble on original content, which is making it easier to gain new subscribers and to keep the existing ones. Netflix has approved second seasons of almost all of its exclusive shows, putting it well ahead of Amazon.com's Prime streaming service, which won't introduce its first batch of original programming until later this year.
Tesla Motors (NASDAQ:TSLA) has had plenty of detractors this year. It started 2013 as one of the most shorted stocks on the market, with 53% of its float representing bearish bets.
But since early January the stock is up better than 200%. Tesla notched some big wins lately, including reaching companywide profitability, ramping up production of its Model S, and seeing that car receive Consumer Reports' highest review rating. But is that enough to justify a huge premium over other carmakers? Not according to many investors, as Tesla is still among the most hated stocks in the market, with 26% of the float sold short.
GameStop's wild ride has earned it another spot on the list. The video game retailer's shares hit a 2013 low in January, at $23, while its industry continued to shrink. Then, after surging to touch $40 on optimism over new game consoles, the stock tanked over fears that those devices would destroy the market for used video games. Now it's back near a five-year high.
GameStop can thank Microsoft for a lot of that volatility. The tech giant rolled out its Xbox One console in June. And despite huge warning signs, the system specs included a restrictive digital rights management system that didn't sit well with gamers. Microsoft has since responded to the complaints and removed those restrictions, leaving GameStop's lucrative trade-in and resale business intact.
Foolish bottom line
Each of these companies could see investor sentiment turn sharply negative again. The stakes are particularly high as they report second-quarter earnings in the coming weeks. However, GameStop, Tesla, and Netflix are sitting on huge year-to-date returns, and that was difficult to imagine just a few months ago.