Some stocks evade bear, reach for highs

By
Matt Krantz, USA TODAY
June 17, 2009, 11:36 PM ET
2 min read

— -- Some stocks that saw the bear market are living to tell the story.

A small group of stocks are inching back to their all-time highs, and in some cases, to levels not seen since before the recession began.

The list is tiny. Just 11 stocks in the Standard & Poor's 1500 index are within 10% of their all-time highs, according to a USA TODAY analysis of data from S&P's Capital IQ.

The fact so few companies have regained their highs shows how badly damaged the stock market remains, says Jack Ablin of Harris Private Bank. We've gotten a bounce, he says, remarking on the S&P 500's 35% rise from its March low. "But you can see, we need a lot more," he says.

A few traits the recovering stocks have include:

•New products. Heart valve maker Edwards Lifesciences ew is one of the stocks closest to its all-time high, 1.7% away. The company launched a product last year in Europe that lets patients get heart valves replaced without open-heart surgery, says Larry Neibor of Robert W. Baird. The product is selling at an annual clip of $100 million, and that could double by the end of the year, Neibor says.

•Cost savings for consumers. Ross Storesrost sells brand-name apparel at steep discounts. The company has also cut its own costs, says Anthony Chukumba of FTN Equity Capital.

Clearwater Paper, clw a recent spinoff from Potlatch that makes consumer paper products, also makes store-brand products for retailers such as Wal-Mart, says Al Cardilli, analyst at Spin-Off Advisors.

•Cost savings for government. As state governments face budget shortfalls, many are looking to save money. And they will look at health costs. HMS Holdings hmsy, which is 1.8% from its high, determines if states have paid Medicaid claims that private insurance companies should have covered. Business will likely pick up through 2010 as unemployment rises, says Jefferies' Richard Close.

Some wonder, though, if investors are pushing some stocks up prematurely. Shares of comic book character company Marvelmvl are 4.6% from their all-time high. Investors expect strong results next year following the success of 2008's Iron Man movie, says Michael Pachter of Wedbush Morgan.

Investors should remember, though, that stock recoveries can be fleeting, and it could take quite some time for other stocks to heal. "The all-time high? That's a high hurdle," Ablin says.