Since the year began, there has been no shortage of stocks on the rise. But gains of better than a 100% have been a rarity, especially in the financial sector. Nevertheless, there have been a handful of financial stocks that managed to more than double in price in the first quarter of 2010. Here are the best performers among them.
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Room Service Profits
Strategic Hotels & Resorts, Inc. (NYSE:BEE) is up 145% since the New Year, and better than 475% over the last twelve months. The REIT owns and operates a global chain of upscale and luxury hotels that operate under the Fairmont, Four Seasons, Hyatt and Westin brands, among others. Compared to the broader financial sector, as represented by the Financial Select Sector SPDR ETF (NYSE:XLF), BEE's performance was nothing short of stellar. The financials as a group managed a mere 12% gain since January 1, 2010.
For the last five years, the company has grown sales at a rate of 12.32%, enough to garner a decent-sized institutional following. Nearly 60% of the shares are owned by the pros. Strategic Hotels' shares trade with a very low price to sales ratio of 0.49.
Insuring the Lenders
The PMI Group, Inc. (NYSE:PMI) provides residential mortgage insurance to corporate clients globally. The stock has risen 150% year-to-date and gained better than 850% over the last twelve months. Much of the company's gain came following recent news that defaults on home loans dropped significantly in February. Compared to the SPDR KBW Insurance ETF (NYSE:KIE), which is up 20% in 2010, PMI's gains are formidable.
PMI shares pay no dividend and have no P/E ratio, as the company is yet to report positive earnings for the latest 12-month period.
Closing Out Risk
Radian Group, Inc. (NYSE:RDN) is in the same field as PMI, providing insurance and reinsurance services to mortgage lenders, municipal bond and other credit issuers. Year-to-date, the company's shares are up over 130%, and for the year that's passed, over 730%.
During the 2009 calendar year, RDN closed out its entire book of CDS transactions, leaving it far less vulnerable to that particular market's volatilities. On the fundamental front, the shares offer a 0.06% dividend and still trade without positive annual earnings. But price to book is a healthy 0.68, and price to sales an equally compelling 1.00.
The Bottom Line
The financials are not dead yet. And certainly if the mortgage insurers can rise, there's hope for that entire sector - let alone all the others. (To learn more, see Financial Funds Provide Diversity... And Risk.)
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