If you predicted a housing rebound in 2012—and put your money where your mouth is—you should have made an enviable profit this year.
Housing, like other parts of the economy, got hammered during the recession but is now making a determined comeback. That's a recurring theme among many of the companies whose stocks were the biggest gainers in 2012: They lost a lot of value during the recession, and have now started to gain some of it back. Some of them may even have been punished too severely during the recession, adding to the snapback now.
To determine the biggest gainers of 2012, I asked S&P Capital IQ to rank the 1,500 largest public U.S. companies according to their year-to-date stock appreciation through early December, when the overall stock market was up by about 12 percent for the year. From that list, I selected companies whose fortunes generally reflect changes in the overall economy over the last 12 months. Here are 10 companies that dazzled in 2012:
Lumber Liquidators (stock price up 179 percent). Sales have come in stronger than expected all year, as a recovering housing market boosts demand for the hardwood flooring sold by this retailer. Impressive efficiency gains have boosted profitability even more.
Pulte Group (up 161 percent). The housing bust was brutal on home builders such as Pulte, but with a recovery underway, construction could be robust over the next several years. The stock prices of other home builders—including KB Home, Ryland, Standard Pacific and Lennar—is also up by double or triple digits this year.
Sprint Nextel (up 140 percent). Sprint stock is far below its all-time highs, but the nation's third-largest wireless carrier has battled back this year with an unlimited-data plan many consumers like, and other innovations. A big investment from Softbank of Japan ought to give Sprint the cash it needs to build out its network and catch up to industry leaders AT&T and Verizon.
Medifast (up 136 percent). There's an upside to the obesity epidemic, if you sell weight-loss products, as Medifast does. The company reaches consumers through a variety of channels, including doctors, the web, direct marketing, and its own chain of weight-loss centers.
Marriott Vacations (up 135 percent). This spinoff from the Marriott hotel chain has enjoyed nice profits this year thanks to the recovering economy and growing demand for the type of resort-based vacation homes the company sells and manages. Steadily improving forecasts for future profitability have helped push the stock up.
OfficeMax (up 114 percent). This office-supply company is bouncing back from a few tough years, and it ought to benefit as small business picks up in 2013. One big contributor to its stock surge is the planned public offering of paper company Boise Cascade, which Office Max owns part of.
Brown Shoe Co. (up 111 percent). This footwear company, which operates the Famous Footwear and Naturalizer chains, has a natural advantage in a tough economy, since its discount merchandise appeals to budget-conscious shoppers trading down from pricier department stores. Analysts also credit the company with astute streamlining efforts that have helped it beat Wall Street earnings forecasts.
AOL (up 109 percent). Once considered dot-com roadkill, AOL has rallied this year, with three profitable quarters in a row and a turnaround strategy that seems to be working. AOL's purchase of the Huffington Post in 2011 and other properties helped it build a rich portfolio of content that has helped draw badly needed advertisers.
Whirlpool (up 107 percent) This appliance maker will be a big beneficiary if the housing market continues to recover as expected, which has helped push up the stock. Whirlpool has been promising impressive improvements in its financial performance, and so far, delivering.
Expedia (up 104 percent). The online travel company has benefited from a pickup in travel as the economy recovers, along with overseas expansion. While many companies were reporting disappointing earnings this fall, Expedia was one of the few that beat expectations for both revenue and profit.
Rick Newman is the author of Rebounders: How Winners Pivot From Setback to Success. Follow him on Twitter: @rickjnewman.