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Tickers in this Article: THC, XRX, PBI, BTU, MEE, CNX, UHS, LPNT
Not that one week makes or breaks a trend, but considering how all big trends start out as small ones, I think we need to stay on top of the stocks and groups leading the market. That's what we've got below... last week's biggest winners, and more importantly, a look at why they were winners. For the purposes of this article I only focus on stocks in the S&P 500, but it's worth mentioning that when adding small caps into the mix, an industry can rapidly move up and down the leader board.

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Healthcare Facilities

Health care facilities did relatively well last week, especially Tenet Healthcare (NYSE: THC), which increased a sizable 39%.

Any longevity to the uptrend? I think it depends on your perspective and time frame.

In the short run, now is a lousy time to jump on the bandwagon, even though analysts did. On Monday May 18, Goldman Sachs upgraded Tenet for many of the same reasons I discussed on April 22... a return to profitably and widening margins. Barclays Capital followed suit on Thursday, adding fuel to the rally's fire. (Refer to Tenet Healthcare's Just Tip of The Iceberg for more.)

As deserved as I clearly feel the upgrades are, I think the Tenet euphoria will wear off soon. And once THC is reeled in a tad, then and only then does it make sense to go shopping. Of course, investor opportunities are just as good with a smaller players like Universal Health Services (NYSE: UHS) and LifePoint Hospitals (Nasdaq: LPNT).

Office Electronics

Pitney-Bowes (NYSE: PBI) and Xerox (NYSE: XRX) had a good week ended May 22, rising 4.2% and 8.8%, respectively.

Xerox shares got some mileage from news of current CEO Anne Mulcahy stepping aside and being replaced by Ursula Burns. It's not a particularly eventful transition, however, as Burns was already president of the company. Thus, the switch is apt to be seamless.

Pitney-Bowes ended the week on a modestly positive note as well, although it did not report any new news.

Any longevity to this strength? I don't know if last week's gains were particularly meaningful, so I'm hesitant to try and hitch a ride. On the other hand, I'd be amiss if I didn't mention that both of these companies have remained profitable through all four of their prior quarters. Moreover, both currently have relatively attractive price-to-earnings ratios - something that can't be said for too many other corporations these days.

Generally, I don't "reward" a company's performance by blindly becoming a stock owner, as I'm one of those oddballs that's learned a stock may or may not reflect corporate performance. In these two cases, however, I suspect even a modest economic recovery could yield a significant boost in earnings.


It wasn't that long ago I took a bullish look at coal, but I don't think it's too soon to revisit the group. (Refer to Coal - Dirty, Beaten Down And Profitable for more.)


There's no specific event or announcement to point to that explains why Massey Energy (NYSE: MEE), CONSOL Energy (NYSE: CNX) and Peabody Energy (NYSE: BTU) all made progress last week, although the degree of back-pedaling following Wednesday's peak is more than a little concerning. So from that perspective, I wouldn't dive into coal looking for more big gains in the immediate future.

Longer-term, I think the group is going to win the war by winning more weekly battles than it loses.

The reason is simple - coal stocks were beaten to a pulp over the prior year or so. But coal usage stats, reliable dividends and palatable P/Es have turned that steep selloff into a great entry opportunity. (If you missed that article, take a look at Coal's Dirty Little Secret.)

Bottom Line
A look at the week's biggest winners could yield entry opportunities for investors.

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