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Best Stocks In October 2010
The best performing stocks in the S&P 500 in October 2010 benefited from realized buyouts, buyout speculation, and better-than-expected earnings or outlooks on business for next year. This list cuts across different sectors from healthcare to energy.
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Pharma and Jobs
King Pharmaceutical (NYSE:KG) was the best performing stock in the S&P 500 in October 2010, returning 42% to shareholders. The company achieved this performance the old fashioned way through a buyout offer from Pfizer (NYSE:PFE), which offered $14.25 per share for the company.
King Pharmaceutical has $1.8 billion in annual sales, and along with a branded prescription segment, has an animal health business and makes auto injector devices to deliver medicine when needed.
Monster Worldwide (NYSE:MWW) also had a great October, and finished up 40%. The company released earnings for the third quarter of 2010, and reported better than expected results for revenue and adjusted earnings. Monster Worldwide also provided an encouraging outlook on revenue for 2011, and expects year-over-year growth in bookings and revenue to be in a range from 20% to 25%.
Speculative Rise
Massey Energy (NYSE:MEE) has been in the news often over the last year due to an explosion at the company's Upper Big Branch mine in West Virginia earlier in 2010. The stock drifted higher all month due to speculation that the company would be put up for sale due to pressure from institutional investors that were not happy with the response of management to the accident. (For related reading, see The Pros And Cons Of Institutional Ownership.)
Massey Energy also reported financial results for the third quarter of 2010, and despite reporting a loss of $41.4 million, or 41 cents per share, the company provided positive news on current business trends. Massey Energy reported that the company signed recent contracts to sell metallurgical coal at prices close to $160 per ton, which was above what many analysts were modeling for next year. The stock ended up 36% in October.
Growing Stock Prices
Another winner in October 2010 was CF Industries Holdings (NYSE:CF), which was up 28%. This agricultural chemical company produces fertilizer and other products used to boost the productivity of agricultural land. Investors feel that demand for these products are in a secular up trend due to increased economic wealth in developing countries, and the subsequent demand for a more varied and nourishing diet.
CF Industries Holdings also received a boost during October 2010 after the release of a report by the U.S. Department of Agriculture. The department cut its forecast of corn leading to speculation that higher prices for corn and other crops would lead to higher plantings in the future and thus higher demand for fertilizer.
Bottom Line
Buyouts and better-than-expected earnings or outlooks was the catalyst for many of the names on the list of the best performing stocks in October 2010. Whether this earnings momentum will continue is the question investors must ponder before jumping into these stocks or selling out of them and taking profits.
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
Pharma and Jobs
King Pharmaceutical (NYSE:KG) was the best performing stock in the S&P 500 in October 2010, returning 42% to shareholders. The company achieved this performance the old fashioned way through a buyout offer from Pfizer (NYSE:PFE), which offered $14.25 per share for the company.
King Pharmaceutical has $1.8 billion in annual sales, and along with a branded prescription segment, has an animal health business and makes auto injector devices to deliver medicine when needed.
Monster Worldwide (NYSE:MWW) also had a great October, and finished up 40%. The company released earnings for the third quarter of 2010, and reported better than expected results for revenue and adjusted earnings. Monster Worldwide also provided an encouraging outlook on revenue for 2011, and expects year-over-year growth in bookings and revenue to be in a range from 20% to 25%.
Speculative Rise
Massey Energy (NYSE:MEE) has been in the news often over the last year due to an explosion at the company's Upper Big Branch mine in West Virginia earlier in 2010. The stock drifted higher all month due to speculation that the company would be put up for sale due to pressure from institutional investors that were not happy with the response of management to the accident. (For related reading, see The Pros And Cons Of Institutional Ownership.)
Growing Stock Prices
Another winner in October 2010 was CF Industries Holdings (NYSE:CF), which was up 28%. This agricultural chemical company produces fertilizer and other products used to boost the productivity of agricultural land. Investors feel that demand for these products are in a secular up trend due to increased economic wealth in developing countries, and the subsequent demand for a more varied and nourishing diet.
CF Industries Holdings also received a boost during October 2010 after the release of a report by the U.S. Department of Agriculture. The department cut its forecast of corn leading to speculation that higher prices for corn and other crops would lead to higher plantings in the future and thus higher demand for fertilizer.
Bottom Line
Buyouts and better-than-expected earnings or outlooks was the catalyst for many of the names on the list of the best performing stocks in October 2010. Whether this earnings momentum will continue is the question investors must ponder before jumping into these stocks or selling out of them and taking profits.
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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