The Best-Performing S&P 500 Stocks of 2011
Ten companies on the benchmark S&P 500 Index have gained as much as 61 percent this year as the third quarter played host to a tumultuous 2011 for the stock market.
Half of the companies are in the health-care industry, and two are in the aerospace and defense industry.
Companies in the S&P 500 have been battered and bruised because of the still-evolving sovereign debt crisis in Europe and the growing threat of a double-dip recession in the U.S. The dysfunction of the U.S. political system hasn't exactly helped.
The index, which tracks the performance of the 500 largest U.S. stocks and is used as a benchmark for the overall health of the U.S. equities market, is down 6.5 percent so far this year, with most of the decline occurring in the past two months.
So the performance of these 10 companies and their shares is noteworthy because it indicates they may outperform, as there's little evidence of a big improvement in global economies.
The following is a snapshot of the 10 top-performing stocks in the S&P 500 this year, ranked by total return. Share prices are as of Sept. 26 and returns as of Sept. 23.
10. Watson Pharmaceutical
Company Profile: Watson is the world's fourth-largest generic pharmaceutical manufacturer and it also operates a branded pharmaceutical division.
2011 Total Return: 37 percent
Current Share Price: $70.88
S&P analysts have an $80 price target on its shares. It has a market value of $9.5 billion.
The company is expected to get a big boost in November when Pfizer's long-time best-seller Lipitor goes off patent and Watson can begin producing a generic version of it.
S&P projects Watson's revenue will grow 25 percent in 2011 to $4.5 billion.
Analysts' consensus earnings estimate for this year is $4.45, and that is expected to grow by 28 percent to $5.70 in fiscal 2012.
Analysts give its shares seven "strong buy" ratings, three "moderate buys," and 10 "holds," according to TheStreet Ratings.
Company Profile: Goodrich is one of the world's largest suppliers of aerospace components, systems and services to the commercial and general aviation airplane markets. It also supplies systems and products to the defense and aerospace markets. Many people still remember Goodrich as a tire maker, but it exited that business in 1988.
2011 Total Return: 38 percent
Current Share Price: $121.51
On Sept. 21, United Technologies announced it reached an agreement to purchase Goodrich for $127.50 per share in cash, for a total enterprise value of $18.4 billion, including the assumption of debt. United Technologies is a manufacturer of high-technology products and services to the global aerospace and building industries.
Analysts give its shares six "strong buy" ratings, two "moderate buys," and 11 "holds," according to TheStreet Ratings.
8. Biogen Idec
Company Profile: Biogen Idec is a biotechnology company, developing drugs for neurological disorders.
2011 Total Return: 40 percent
Current Share Price: $95.85
Biogen's core franchise has been in autoimmune disorder drugs, principally Avonex, which was approved by the FDA in 1996 to treat multiple sclerosis.
Recent approval of a five-year marketing plan for the drug Tysabri in Europe and a positive study for Avonex have impressed Biogen's investors. Biogen also has a strong pipeline as it has several products already in or entering Phase III clinical trials.
Its shares are up 70 percent over the past 12 months and have a three-year average annual return of 26 percent. The company has a $23 billion market value.
For fiscal 2011, analysts estimate that Biogen will earn $5.87 per share and that that will grow by 8 percent to $6.34 in 2012.
S&P analysts have a price target of $108 on its shares.
Company Profile: Humana offers an array of health and supplemental benefit products for employer groups, government benefit programs and individuals. It is one of the nation's largest managed care organizations, with over 11 million members.
2011 Total Return: 41.4 percent
Current Share Price: $77.88
S&P analysts have a $90 price target on its shares, which currently have a market value of $12.7 billion.
For the five years through 2010, Humana's health plan enrollment grew at a compound annual growth rate (CAGR) of 3.7 percent, revenue grew at an 18.4 percent CAGR and operating earnings per share at a 28.6 percent CAGR, according to an S&P analyst's report.
Analysts' consensus earnings estimate is for $7.64 per share this year, growing 2 percent in 2012 to $7.81 per share.
Analysts give its shares 14 "strong buy" ratings and 11 "holds," according to TheStreetRatings.
6. Intuitive Surgical
Company Profile: Intuitive Surgical designs, manufactures and markets its da Vinci robotic surgical systems, EndoWrist instruments and surgical accessories.
2011 Total Return: 42 percent
Current Share Price: $ 374.97
S&P analysts put a $420 price target on its shares. It currently has a market value of $14.6 billion.
Shares of Intuitive Surgical briefly topped $400 in July after second-quarter earnings. In the period, the company posted earnings of $2.91 per share on revenue of $426 million, both of which topped analysts' expectations.
Revenue grew 34 percent in 2010, driven by sales of its new da Vinci system. For fiscal 2011, analysts estimate the company will earn $11.46 per share and that will grow by 18 percent to $13.51 in 2012, according to S&P.
Analysts give the company six "strong buys" and nine "holds," according to TheStreet Ratings.
Visit TheStreetto see the rest of 2011’s top-performing S&P 500 stocks.
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