by Jeff Reeves | March 6, 2014 4:15 pm
It has been almost five years since the S&P 500 index bottomed on March 9, 2009. The benchmark index for blue-chip stocks closed at 676.53 that day.
Now, the S&P is up roughly 170% and setting new records like clockwork. Any day now, it could push through the 1900 mark.
But not all components in this stock market index are created equal. There are some stocks like troubled retailer Staples (SPLS) that have completely sat out this massive bull market … and some of the best stocks from the S&P 500 since that time have put the 170% gains of the index to shame, boasting returns that are as much as 15 times as great!
So what are the best stocks since the March 9, 2009, lows? And more importantly, what’s their outlook going forward?
Let’s take a look at these S&P 500 outperformers:
Market Capitalization: $18.4 billion
Total Return Since 3/9/2009: 1,108%
Chipotle Mexican Grill (CMG) has been on a tear since the bear market lows. But unlike some of the other stocks on this list, the surge since 2009 has only a small amount to do with a relief rally and a lot to do with aggressive expansion and rapid growth for the restaurant chain.
In its 2009 annual report, Chipotle showed about $1.5 billion in total sales. In 2013, that figure was just more than $3.2 billion.
As consumers turn away from typical fast-food fare and look for options that are fresher and less processed, CMG stock should continue to do well.
Take Chipotle’s big pop after strong January earnings the latest proof.
Industry: Oil & Gas Exploration
Market Capitalization: $28.3 billion
Total Return Since 3/9/2009: 1,550%
Pioneer Natural Resources (PXD) is one of the leading oil and gas exploration companies in America right now, and is the poster child for the fracking boom.
Hydraulic fracturing of shale in the U.S. has allowed previously difficult-to-access energy supplies to be brought to market quickly — and with big results for companies like PXD.
Pioneer has more than doubled its revenue since the Great Recession, and PXD shares have soared as a result. However, it’s worth noting that the rush into fracking has resulted in oversupply that has held back profits lately — and an increase in expenses has actually caused Pioneer to swing to a loss in its most recent quarter.
Market Capitalization: $71.1 billion
Total Return Since 3/9/2009: 1,641%
Priceline.com (PCLN) is best known for its “Negotiator,” William Shatner, ninja-kicking his way to the lowest possible prices on hotel and airline reservations in the company’s ad campaigns. But don’t let the playful marketing fool you — PCLN is a serious business making some serious cash as online travel booking becomes the default method for businesses and consumers alike.
PCLN stock has surged since 2009 thanks in part to a rebound in travel spending, but also because it has maintained dominance in an industry that still is growing fast — particularly in overseas markets.
Priceline had roughly $2.3 billion in revenue as of its 2009 annual report, but sales have soared to almost $6.8 billion for 2013. No wonder PCLN has been on a tear.
Market Capitalization: $19.1 billion
Total Return Since 3/9/2009: 1,642%
Fifth Third Bancorp (FITB) is one of many financial stocks that investors abandoned in droves during the mortgage meltdown.
There was little visibility on which banks were going bankrupt, which ones would be weighed down by losses for years to come and which ones would come out OK. But over the last few years, regional bank Fifth Third has shown stability by repaying its $3.4 billion bailout loan and lifting its dividend from a mere penny per share during the Great Recession to 12 cents quarterly now.
The bank still is well under its highs reached in the early 2000s, as is its dividend payout. But clearly the worst is over — FITB has bounced back handsomely, proving the bears were overly pessimistic in 2009.
Market Capitalization: $16.5 billion
Total Return Since 3/9/2009: 1,702%
Seagate Technology (STX) is one of the leading hard disk drive manufacturers in the world. And while it has remained dominant and has surged from the bear market lows, STX has faced its share of detractors over the last few years.
The convergence of a “post-PC” age with a big slowdown in corporate IT spending led to ugly results and worse forecasts for STX about five years ago. However, although Seagate posted a big loss to start 2009, the company restructured and adjusted nimbly to the new market environment.
Now, revenue is actually well up from 2009 levels despite weak PC sales thanks to Seagate branching out into other areas of the electronics memory market and even cloud computing. Better margins and decent sales have lifted the stock, proving the bears wrong and delivering big returns to STX shareholders.
Market Capitalization: $8.3 billion
Total Return Since 3/9/2009: 1,741%
Genworth Financial (GNW) isn’t a retail bank like some of the big names wrapped up in the financial crisis, but nonetheless was hit hard by the meltdown. Genworth’s exposure was through insurance on mortgages, and as folks were foreclosed on and loans went bad, GNW took it on the chin; the stock fell from a high of about $36 in 2007 to less than $1 per share on March 9, 2009.
But the financial crisis sparked big changes — some that were needed to deal with the shoddy financial situation brought on by bad mortgages, and some that were needed to streamline the company and adapt to a more sustainable business model.
GNW shares still are below their peak, but like Fifth Third, it is clear that Genworth is not at risk of evaporating anymore — and investors who took a flier on the stock in 2009 have been handsomely rewarded.
Market Capitalization: $25.1 billion
Total Return Since 3/9/2009: 2,117%
Wynn Resports (WYNN) is a major casino player that has cashed in big-time on the rapid growth of gaming in Asia via expansion into Macau, a region controlled by China.
Wynn was one of the first casinos to push into Macau, operating under a 20-year agreement with the government there. It opened its first casino there in late 2006, and while the world was captivated with the financial crisis it forgot about the rapid growth of Wynn in this region.
Powered by its Asia operations, which have only grown in the last few years, WYNN stock has exploded more than 20-fold. No surprise, as its net income has soared from a mere $39 million in 2009 to $777 million in net income last year — proving the big investments in Asia were worth it.
Market Capitalization: $40.1 billion
Total Return Since 3/9/2009: 2,293%
CBS Corp. (CBS) is a household name thanks to its broadcast cable network. But across the mid-2000s, CBS was the butt of many jokes in the TV biz thanks to a lack of popular programming other than the many incarnations of CSI or its reality staple Survivor.
But in 2005, CBS was spun off of parent Viacom (VIAB) and re-centered itself around its core TV business. Thanks to this effort and the strength of newer shows like Big Bang Theory and Two and a Half Men, in 2012 CBS recaptured the top spot in the key 18-49 demographic for the first time in 21 years.
Revenue and profits have been growing handsomely, and the company continues to experiment with online offerings — including the 2008 acquisition of tech website CNET.
Market Capitalization: $9.7 billion
Total Return Since 3/9/2009: 2,557%
Wyndham Worldwide (WYN) operates Days Inn, Super 8, Ramada and other resort and hotel arms across the globe.
And while during the depths of the financial crisis it seemed unlikely anyone would ever splurge on a vacation ever again, things have improved on the spending front — and deep cost-cutting made to boost margins have paid off.
Wyndham now commands well more than 600,000 “rooms” worldwide in thousands of properties, and revenue has gone from $3.7 billion in 2009 to more than $5 billion in 2013.
Market Capitalization: $33.8 billion
Total Return Since 3/9/2009: 2,629%
Regeneron (REGN) is a rarity in the pharmaceutical space in that it is on the forefront of new drugs under patent protection with “blockbuster” potential — that is, more than $1 billion in annual sales.
The spark that pushed REGN stock to stratospheric heights was the 2012 approval of Eylea — a medication to prevent “wet” age-related macular degeneration (AMD). Macular degeneration affects some 15 million people in America alone, and wet AMD, while only constituting about 10% to 15% of cases, is highly likely to lead to blindness. Thus, this drug has a very high ceiling thanks to wet AMD’s severity.
The company had mildly outperformed prior to that 2012 approval, but really took off in 2011 leading up to the news and continued to run afterwards.
A steady flow of other favorable drug news, including approvals and research trials, has helped provide extra pop that has made REGN stock the envy of Wall Street for the last five years.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at email@example.com or follow him on Twitter via @JeffReevesIP.
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