7 Outstanding Winners From The Dow's Recent Rally

by: Bill Maurer

Lately, we've seen one of the biggest rallies in market history. Last week, we almost saw the first 1,000 point weekly gain in the Dow. The European situation has improved, or so we're supposed to think. This has brought in a load of buyers and forced shorts to run for the exits. Despite good overall news, there have been a number of winners who've benefited from positive news on their own fronts. Here are the seven biggest winners I've noticed over the past week or so.

LinkedIn (LNKD): The online professional networking site took a tumble a few weeks ago as its insider lockup expired, allowing several million shares to be sold. At one point, the stock was trading below $56. At that price, LinkedIn was over 54% below its 52-week high, reached on its first day of trading. It seems that the company became a nice value recently, as buyers have flocked in and shorts have moved aside. A couple of positive notes from analysts have been extremely helpful to the recent rally, which has shares up over 30% in the past week.

Green Mountain Coffee Roasters (GMCR): One of this year's most controversial stocks has jumped off of lows recently despite a large short balance and the continuing headwinds the company is facing going forward. The stock lost 60% of its value after a negative presentation from Hedge Fund titan David Einhorn as well as showing a huge revenue miss in its latest earnings report. On November 11th, the stock hit a low of $34.06. At Monday's high of $60.19, the stock was up 77% in just three weeks and up 17% from last week's low. There obviously has been a ton of short covering in this name, but given the company's questionable accounting and cloudy future due to stronger competition, one must wonder if the shorts are about to retake this one.

Orbitz Worldwide (OWW): The online travel site saw a huge move up in the beginning of October when the stock announced earnings. Shares went from $1.75 to $3.20. They lost some of those gains throughout November, and were recently as low as $2.75. But the melt up last week sent shares higher, and an upgrade on Tuesday morning sent shares into orbit. The stock finished the day up 13.7%, although it was up 22% at one point during the day. This equals a 45% rally since November 23rd, and a 128% rally since November 1st. I've unfortunately had this stock in my model short portfolio for the entire rally, but I still don't see it worth what it is. Earnings expectations haven't come up that much recently. The P/E on 2012 expected earnings has gone from 13.46 to 23.47. I still think that's overpriced.

Zumiez (ZUMZ): Shares of the specialty retailer rocketed higher last week after a great earnings report. The stock blew away expectations and has been rewarded for its consistent beats, quarter after quarter. Future expectations are starting to creep up as analyst come out with their updated notes, helping shares to maintain gains. Shares are up 42% since November 25th.

General Electric (GE): Shares of the industrial giant have rebounded over the promise of a European solution, as well as positive analyst coverage in the U.S. Also, the company has stated it is ready to increase dividend payments as soon as it gains approval from the Fed; a positive sign for investors. GE shares have rallied 13.9% off of last week's low, about 50% more than the overall market rally.

Salesforce.com (CRM): Shares of the cloud computing and customer relationship management firm have rallied back after a post-earnings fall. While the company beat (non-GAAP) on the bottom line, a revenue miss sent shares plummeting from the upper $130s to $103.38 on November 25th. Volume has picked up since then and so have the buyers. The stock has rallied 20% off that recent low, and was 25% off the low Tuesday before some profit-taking took place. Everyone agreed that the stock would fall after earnings, and it did, but many didn't realize that it fell too much. I expected this rebound to take place, although I didn't think it would occur this quickly.

Clearwire (CLWR): Shares of the wireless broadband services company have rocketed higher after agreeing to a new partnership deal with Sprint. Just a few weeks ago, the firm's CEO was mulling default on its December 1st interest payment in an effort to gain much needed financing. Sprint threw out a lifeline last week, extending its deal over the next couple of years. On Monday, Clearwire announced a massive equity offering. While those offerings are usually negative for shares, Clearwire shares actually rallied because it's positive news as it means Clearwire is back from the dead. At least for now. Shares are up 69% since November 30th and have doubled since October 11th.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.