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The Best Mid Cap Stocks Of 2008
Although the S&P 500 turned in its worst performance since 1937, declining 38.5% in 2008, it wasn't all doom and gloom in the stock market, as many issues managed to finish the year with large gains. The top five performing mid cap stocks in 2008 had one thing in common: none of them was the result of a takeover.
Sequenom Inc. (Nasdaq:SQNM) is a diagnostic company that specializes in genetic analysis. One of its more promising products is a test designed to detect fetal Down syndrome, a condition currently detected by amniocentesis or chorionic villus sampling. Both of these tests are invasive, not completely accurate and increase the risk of miscarriage. TheU.S.
Sequenom shares returned 108% in 2008, and investors had better hope that the diagnostic test is a hit because the company had an operating loss in 2005, 2006, 2007 and the first nine months of 2008.
Crawford & Co. (NYSE:CRD-B) provides claims management services to insurance companies in many different lines, including property and casualty, product liability, medical, and others. In 2008, Crawford beat estimates the last three quarters. Earnings are estimated to be 70 cents per share in 2009, up from 56 cents in 2008. Jeffrey T. Bowman, the company's CEO, said "our third quarter 2008 operating results reflected sustained growth in our business, achieved through incremental revenues and the results of our continued focus on cost control and technology-led process improvements. This performance builds on the solid results generated thus far in 2008 in the face of an increasingly difficult macroeconomic environment." Crawford finished 2008 up 250%. (Learn how beating estimates can affect a stock price in Earnings Forecasts: A Primer.)
Emergent BioSolutions (NYSE:EBS) is a biopharmaceutical company that manufactures vaccines that help the body's immune system fight disease. Its main product is BioThrax, which is a vaccine to treat anthrax infection. The company also has various products in development to treat typhoid, hepatitis and botulism. Emergent BioSolutions put out strong earnings in the third quarter of 2008 and reported that revenues were up 30%, to $56.6 million (35 cents per share). The company increased its full year guidance for 2008 from 70 cents to 83 cents per share. It recently renewed a contract with the federal government to supply millions of doses of the vaccine. The stock was up 416% in 2008. (Learn how to find a healthy pharmaceutical investment in a market full of weak drugs in Measuring The Medicine Makers.)
Fuel Systems Solutions, Inc. (Nasdaq:FSYS) is a supplier of alternative fuel components and systems for use in the transportation industry. The products are used to control the pressure and flow of natural gas and propane in internal combustion engines. The company had strong earnings momentum during the year and has beat estimates the last four quarters. Earnings next year are estimated to be $2.06, about flat with 2008. The stock finished up 129% in 2008.
American Italian Pasta Co. (Nasdaq:AIPC) was up 219% in 2008. The company put out a solid fiscal 2008 when it reported last month, with revenues up 43% to $569 million (99 cents per share). The company has recovered nicely from the accounting and financial reporting problems that derailed the stock in 2005 and 2006, and led to its delisting in 2007.
Bottom Line
The five best mid cap stocks in 2008 were diversified across industries, and proved that in the worst market in 60 years, the adage that "stock picking is everything" couldn't have been truer.
Sequenom Inc. (Nasdaq:SQNM) is a diagnostic company that specializes in genetic analysis. One of its more promising products is a test designed to detect fetal Down syndrome, a condition currently detected by amniocentesis or chorionic villus sampling. Both of these tests are invasive, not completely accurate and increase the risk of miscarriage. The
Sequenom shares returned 108% in 2008, and investors had better hope that the diagnostic test is a hit because the company had an operating loss in 2005, 2006, 2007 and the first nine months of 2008.
Crawford & Co. (NYSE:CRD-B) provides claims management services to insurance companies in many different lines, including property and casualty, product liability, medical, and others. In 2008, Crawford beat estimates the last three quarters. Earnings are estimated to be 70 cents per share in 2009, up from 56 cents in 2008. Jeffrey T. Bowman, the company's CEO, said "our third quarter 2008 operating results reflected sustained growth in our business, achieved through incremental revenues and the results of our continued focus on cost control and technology-led process improvements. This performance builds on the solid results generated thus far in 2008 in the face of an increasingly difficult macroeconomic environment." Crawford finished 2008 up 250%. (Learn how beating estimates can affect a stock price in Earnings Forecasts: A Primer.)
Fuel Systems Solutions, Inc. (Nasdaq:FSYS) is a supplier of alternative fuel components and systems for use in the transportation industry. The products are used to control the pressure and flow of natural gas and propane in internal combustion engines. The company had strong earnings momentum during the year and has beat estimates the last four quarters. Earnings next year are estimated to be $2.06, about flat with 2008. The stock finished up 129% in 2008.
American Italian Pasta Co. (Nasdaq:AIPC) was up 219% in 2008. The company put out a solid fiscal 2008 when it reported last month, with revenues up 43% to $569 million (99 cents per share). The company has recovered nicely from the accounting and financial reporting problems that derailed the stock in 2005 and 2006, and led to its delisting in 2007.
Bottom Line
The five best mid cap stocks in 2008 were diversified across industries, and proved that in the worst market in 60 years, the adage that "stock picking is everything" couldn't have been truer.
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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