Tickers in this Article: MMI, CF, ORLY, AN, MSI, GOOG
The S&P 500 dropped nearly 6% in August 2011, marking it the fourth straight monthly loss for this popular index. Despite this poor performance, there were a number of stocks that ended the month higher, reminding investors that stock picking is a valuable skill. (To help you choose winners, read 4 Steps To Picking A Stock.)

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The Winners
Motorola Mobility Holdings
(NYSE:MMI) was the best performing stock in the S&P 500 in August 2011, soaring 69% for the month on the strength of a $12.5 billion buyout offer from Google (Nasdaq:GOOG).

Motorola Mobility Holdings shareholders are set to receive $40 per share, a premium of 63% over the closing price the day prior to the offer. Motorola Mobility Holdings used to be part of Motorola Solutions (NYSE:MSI) and was spun out in early 2011.

While some questioned Google's strategy in acquiring the company, Google receives a portfolio of patents from Motorola Mobility Holdings as well as valuable tax benefits from utilizing its net operating losses that have accumulated over the last few years.

CF Industries Holdings (NYSE:CF) was up 18% for the month as this fertilizer company benefited from a strong earnings report at the beginning of August. The company beat consensus earnings estimates by 92 cents per share and has seen earnings estimates for 2012 move higher by 20% over the last 30 days. CF Industries Holdings also increased its quarterly dividend by 300%, moving it from 10 cents to 40 cents per share.

O'Reilly Automotive (Nasdaq:ORLY), which operates a chain of auto parts stores, also received an earnings related lift, with the company raising its guidance on 2011 adjusted earnings to a range of $3.53 to $3.63 per share compared to the previous guidance range of $3.49 to $3.59.

O'Reilly Automotive also added another $500 million to its stock repurchase program, increasing the total authorization to $1 billion. The stock finished August up by 9%.

Another company in the automotive business made the list of best performing stocks for August 2011. Auto Nation (NYSE:AN), which operates a network of auto dealerships selling both new and used cars, finished the month up 7%.

Auto Nation reported mixed financial results for the second quarter, beating consensus earnings estimates by 3 cents per share, but missing on the top line. Management is still optimistic about car sales for the balance of 2011, despite fears of a possible contraction in economic activity. The company is looking for an 8% increase in sales industry wide in 2011 relative to last year.

Auto Nation is also the most shorted stock in the S&P 500, with 12 million shares sold short as of August 25, 2011. This represents approximately 31% of the company's float.

The Bottom Line
Investors wise enough to have gains on some stocks in August 2011 might want to take some profits, as the sensitivity of the market to upcoming reports on the strength of the economy will create a volatile September. (To learn more, check out Top-Down Analysis: Finding The Right Stocks And Sectors.)

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