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Surprises Among Best Mid Cap Stocks
The five best performing mid cap stocks in the S&P 500 in September 2009 came from five different sectors, and shared nothing in common except the joy they brought to shell-shocked investors who might have forgotten just how good equities can be.
IN PICTURES: How To Make Your First $1 Million
Hot Off The Press
It may come as news to those who have pronounced the death of printed newspapers, but Gannett Co. (NYSE:GCI) was one of the best performing mid cap stock in September 2009, up 45.5%.
Newspapers have seen a slow erosion of advertising revenue and readership over the last decade as many businesses started to shift ad budgets toward the internet. This slow erosion became a tidal wave once the recession hit and total ad budgets were cut.
Gannett surprised the street by issuing guidance above analyst estimates. Gannett said that non-GAAP earnings per share for the third quarter would be in a range of $0.39-0.42, compared to estimates of $0.29. Gannett's prospects have improved so much that the company also was able to issue $500 million in two separate notes. The company will use the funds to pay down its credit line, thus extending its maturities.
The Rumor Mill At Work
Dynegy (NYSE:DYN) returned 34.2% to investors in September. The company benefited from market speculation that NRG Energy (NYSE:NRG) was interested in acquiring the company. No price was mentioned but the news enticed investors eager to generate alpha.
Place Your Bets
Wynn Resorts Ltd. (Nasdaq:WYNN), also had a great month, and finished up 31%. Wynn Resorts owns casinos in theU.S. and Macau , and casino stocks in general have had a huge run the last few months, as market worries regarding debt defaults have receded into the background.
At the end of September, Wynn Resorts did an initial public offering of 25% of its Macau operations, and raised $1.6 billion. The shares will trade in Hong Kong and the deal was far oversubscribed by investors enthusiastic to get involved with the sector.
The Chips Are Up
Advanced Micro Devices (NYSE:AMD) saw its shares move 29.8% higher during the month. The company benefited from a sector rally for all chipmakers, as the personal computer cycle appears to have bottomed, and orders have started to flow again.
A Healthy Prognosis
Tenet Healthcare (NYSE:THC) gained 26.2% in September. This is especially noteworthy because many healthcare stocks performed poorly during September due to investor concern over the effect of any healthcare legislation being debated in Congress. Tenet raised its guidance in the middle of the month, something that always delights investors.
The company said that its adjusted EBITDA for 2009 would be in a range of $900-$950 million, compared to the prior outlook range of $810-$875 million.
Tenet also took advantage of the investor enthusiasm during the month, and issued mandatory convertible preferred stock, raising $335 million in net proceeds. The company immediately used the funds to redeem a bond issue due in 2015.
The Bottom Line
Investors in September reaped huge returns by exercising the time-honored craft of stock picking, along with the audacity of rummaging through stocks and sectors that the rest of the street had discarded as unworthy of investment. (To learn more, read Determining What Market Cap Suits Your Style.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
IN PICTURES: How To Make Your First $1 Million
Hot Off The Press
It may come as news to those who have pronounced the death of printed newspapers, but Gannett Co. (NYSE:GCI) was one of the best performing mid cap stock in September 2009, up 45.5%.
Newspapers have seen a slow erosion of advertising revenue and readership over the last decade as many businesses started to shift ad budgets toward the internet. This slow erosion became a tidal wave once the recession hit and total ad budgets were cut.
Gannett surprised the street by issuing guidance above analyst estimates. Gannett said that non-GAAP earnings per share for the third quarter would be in a range of $0.39-0.42, compared to estimates of $0.29. Gannett's prospects have improved so much that the company also was able to issue $500 million in two separate notes. The company will use the funds to pay down its credit line, thus extending its maturities.
The Rumor Mill At Work
Dynegy (NYSE:DYN) returned 34.2% to investors in September. The company benefited from market speculation that NRG Energy (NYSE:NRG) was interested in acquiring the company. No price was mentioned but the news enticed investors eager to generate alpha.
Place Your Bets
Wynn Resorts Ltd. (Nasdaq:WYNN), also had a great month, and finished up 31%. Wynn Resorts owns casinos in the
The Chips Are Up
Advanced Micro Devices (NYSE:AMD) saw its shares move 29.8% higher during the month. The company benefited from a sector rally for all chipmakers, as the personal computer cycle appears to have bottomed, and orders have started to flow again.
A Healthy Prognosis
Tenet Healthcare (NYSE:THC) gained 26.2% in September. This is especially noteworthy because many healthcare stocks performed poorly during September due to investor concern over the effect of any healthcare legislation being debated in Congress. Tenet raised its guidance in the middle of the month, something that always delights investors.
The company said that its adjusted EBITDA for 2009 would be in a range of $900-$950 million, compared to the prior outlook range of $810-$875 million.
Tenet also took advantage of the investor enthusiasm during the month, and issued mandatory convertible preferred stock, raising $335 million in net proceeds. The company immediately used the funds to redeem a bond issue due in 2015.
The Bottom Line
Investors in September reaped huge returns by exercising the time-honored craft of stock picking, along with the audacity of rummaging through stocks and sectors that the rest of the street had discarded as unworthy of investment. (To learn more, read Determining What Market Cap Suits Your Style.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Eric Fox
Eric J. Fox, CFA, is a freelance financial writer and has previous experience working in the asset management industry as an equity analyst and portfolio manager on the buy side. His favorite area to write on is the energy sector and he keeps current on the industry by reading Haynesville Shale, Permian Oil and Gas and various other blogs.
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