January was not a fun month to be an equity investor, but not all stocks were down, and a handful even showed dramatic gains. This included three financial stocks that were among the worst performing stocks in the S&P 500 in 2009.

IN PICTURES: 8 Signs Of A Doomed Stock

Marshall & Isley Corp (NYSE:MI), Zions Bancorp (Nasdaq:ZION) and Huntington Bancshares (Nasdaq:HBAN) all lost more than 50% of their value in 2009, as they saw loan portfolios go sour during the year. Yet all three had dramatic comebacks in January, as investors decided to make bets that things will get better for these banks in the new year.

Zions Bancorp was the best-performing stock in the S&P 500 for the first month of 2010, returning 48% to investors. The bank reported a loss of $176.5 million, or $1.26 per share in the fourth quarter of 2010, but investors were heartened by a sequential increase in the company's tangible common equity ratio and signs of improvement in other credit metrics.

However, despite this strong gain, Zions Bancorp remains well below its pre-recession high price of $80 per share reached early in 2007.

Marshall & Isley Corp. reported a loss in the fourth quarter of 2009 of $259.5 million, or 54 cents per share. The bank also showed a slight improvement in key credit quality metrics relative to previous quarters, convincing investors that the peak in losses might have passed.

Greg Smith, the CFO of Marshall & Isley, touted this improvement during the earnings conference call. "Early stage delinquencies, which decreased for the third consecutive quarter, continued improvement in total nonperforming loans, which decreased for the second consecutive quarter," said Smith. Marshall & Isley Corp was up 26% in January.

Huntington Bancshares rebounded strongly during January, returning 30%. Earnings were once again the catalyst along with a perception that things were "less worse" at the bank. During the conference call, Steve Steinour, the CEO, said, "sometime during 2010 we expect to return to quarterly profitability."

KeyCorp (NYSE:KEY), another bank, was up 26% in January, as it reported a smaller year-over-year loss in the fourth quarter of 2009. The bank is one of the largest regional banks with nearly 1,000 branches in 14 states.

The second best performing stock in January, and the only non-financial stock on the list, was Eastman Kodak (NYSE:EK), which was up 40% for the month. Kodak shocked the Street by reporting a GAAP profit of $430 million in the fourth quarter of 2009. During the earnings conference call, management proudly proclaimed that the company was "gaining momentum" after more than a year of losses.

The Bottom Line
Most investors probably spent the weekend recovering from January's poor stock performance, but there are a few stocks whose January performance left investors with something to celebrate. (Find out how to pick your own investments like a pro. Read How Investors Can Screen For Stock Ideas.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Investing

    Time to Bring Active Back into a Portfolio?

    While stocks have rallied since the economic recovery in 2009, many active portfolio managers have struggled to deliver investor returns in excess.
  2. Economics

    Investing Opportunities as Central Banks Diverge

    After the Paris attacks investors are focusing on central bank policy and its potential for divergence: tightened by the Fed while the ECB pursues easing.
  3. Stock Analysis

    The Biggest Risks of Investing in Pfizer Stock

    Learn the biggest potential risks that may affect the price of Pfizer's stock, complete with a fundamental analysis and review of other external factors.
  4. Stock Analysis

    Allstate: How Being Boring Earns it Billions (ALL)

    A summary of what Allstate Insurance sells and whom it sells it to including recent mergers and acquisitions that have helped boost its bottom line.
  5. Options & Futures

    Cyclical Versus Non-Cyclical Stocks

    Investing during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
  6. Markets

    PEG Ratio Nails Down Value Stocks

    Learn how this simple calculation can help you determine a stock's earnings potential.
  7. Investing

    How to Spot Secular Bull Markets vs. Secular Bear Markets

    A guide to identifying secular bull and bear markets.
  8. Investing Basics

    How to Deduct Your Stock Losses

    Held onto a stock for too long? Selling at a loss is never ideal, but it is possible to minimize the damage. Here's how.
  9. Financial Advisors

    Bull vs. Bear Markets: How to Be Prepared for Both

    Bull and Bear Markets are a reality that every investor must be prepared for. Here are a few tips.
  10. Investing

    What’s the Difference Between Duration & Maturity?

    We look at the meaning of two terms that often get confused, duration and maturity, to set the record straight.
  1. Which mutual funds made money in 2008?

    Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
  2. What does low working capital say about a company's financial prospects?

    When a company has low working capital, it can mean one of two things. In most cases, low working capital means the business ... Read Full Answer >>
  3. Do nonprofit organizations have working capital?

    Nonprofit organizations continuously face debate over how much money they bring in that is kept in reserve. These financial ... Read Full Answer >>
  4. Can a company's working capital turnover ratio be negative?

    A company's working capital turnover ratio can be negative when a company's current liabilities exceed its current assets. ... Read Full Answer >>
  5. Does working capital measure liquidity?

    Working capital is a commonly used metric, not only for a company’s liquidity but also for its operational efficiency and ... Read Full Answer >>
  6. How do I read and analyze an income statement?

    The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>

You May Also Like

Trading Center