When investors sell a particular stock in large volumes it is sometimes for a good reason. Perhaps the company has lost its competitive edge, or is expected to generate poor earnings. Sometimes, however, companies that are left for dead can end up being great opportunities for patient investors. With that as a backdrop today we will touch on two high profile companies and recent comeback stories.

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Time to Dock at Pier 1?
Pier 1 Imports (NYSE:PIR) is a retailer of home furnishings and other items. Not all that long ago its stock had been languishing in the low single digits. The reasons were simple: the economy was in rough shape, competition was stiff and its earnings prospects left a great deal to be desired. But the stock has stepped back from the abyss.

In fact, the shares have rocketed up from around a buck a share in the last year to more than $8. Plus, some things have changed, such as the economy and the stock market now showing some signs of life. As well, the company's management has worked to keep costs under control and to drive the top line, and estimates for both this year and next year have been moving higher overall over the last few months. There could be even further upside potential as Americans ramp up their spending and housing demand picks up. However, the shares have come a very long way and so some profit taking is not out of the question. Of course Pier 1 isn't the only comeback story worth noting.

Tide Turns for GE
When the equity markets were bleeding profusely and it looked as if the entire financial system in the U.S. could go down the drain, many traders and investors bailed out of General Electric (NYSE:GE). The reason for this was that many of the company's wares, ranging from appliances to aircraft engines, could see a huge drop in demand as the U.S. economy contracted. The shares traded into the single digits in 2009.

But the tide seems to have turned in a big way for the company that, as the timeless commercial says, "brings good things to life." These days the stock trades in the high teens, and it should be noted that the company has exceeded Wall Street expectations for the last four quarters straight, which has captured the attention of investors.

Moreover, the future looks bright as the macro economy is rebounding. We could see a sizable pickup in demand for its products over the next several years as the economy hopefully hits its stride. Clearly it would have made sense to pay closer attention to the mass of insider buying activity that occurred in the March 2009 timeframe when the stock was in the single digits.

Stocks on the Comeback Trail?
Shares of Hot Topic (Nasdaq:HOTT) were a hot ticket in the early part of 2009, but it wasn't meant to last. The shares sold off and traded under $6 in the earlier part of 2010. However, since that time, they have rebounded to more than $8.50. With the consumer finally becoming more liberal in their spending, and the company's ability to meet expectations in its last couple of quarters, the stock is starting to look a bit more interesting. In the year to come, there is a chance the stock could head into the double digits as the investment community realizes that this company isn't dead in the water.

Palm, Inc (Nasdaq:PALM) had traded in the double digits earlier this year. But it lost serious ground from those levels, and traded under $5. However, there is speculation that the company could be bought out or somehow combine forces with a larger company. I don't know for certain if that will happen, bu tI would be reluctant to count the company out.

Bottom Line
Everybody loves a good comeback story and Pier 1 and General Electric are great examples of companies that have seen their share prices rebound markedly thanks to the economic recovery and for company-specific reasons. (For more, check out Oversold Stocks Primed To Pop.)

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Tickers in this Article: PIR, HOTT, GE, PALM

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