The end of a year is always a time for reflection: and as 2011 comes to an end there has been several good lists or articles to summarize the events that have taken place during the last year. During the last two weeks I've read quite a few best and worst CEO's or companies of 2011. I've noticed that lists such as these occur quite often and although they are simply opinions I still find them to be interesting. Therefore, I've decided to create a list of what I believe are the most under rated CEO's of 2011. These CEO's receive little acknowledgment but have performed all the necessary functions in order to successfully run a publicly traded company. These CEO's have led their companies to fundamental improvements along with large returns for its shareholders. And I believe that each of these CEO's has been so efficient that we can expect more of the same in 2012.
6. Don Bailey Questcor Pharmaceuticals (QCOR)
Questcor Pharmaceuticals is rarely discussed and its CEO Don Bailey doesn't see his name on too many "Best CEO" lists. However, since 2007 when he was announced as the interim president the stock's posted gains of nearly 5,000%. In other words a $10,000 investment when he became the interim president would be worth more than $650,000 today. His return has been consistent including a near 200% gain year-to-date; and I believe that returns such as this should be celebrated. However, there are several biotech companies that have produced large returns over the last year; yet very few with a transcendent drug and large growth as the driving force behind the gains. In 2011, there were several speculative biotech stocks to trade higher but QCOR continues to return large gains because of earnings and revenue that nearly double, every quarter, year-over-year.
The story of its lead drug Acthar is quite remarkable which can be found on the company's website. It was an outcast from large pharma and Questcor attempted to produce the drug, which of course was accomplished with much success. The attempt has since paid off and the drug has become one of the fastest growing multipurpose drugs within the market and its complex nature makes it very difficult to replicate with generics or similar drugs. The future looks bright and Don Bailey consistently does his job as CEO and encourages investors with visions of future growth. Just recently the sales team of the company, who markets the drug, increased from roughly 5 to just under 30 which shows that the company believes the growth potential for the drug is very large. The future for this company is exciting and because of Acthar's effectiveness and the number of conditions that it treats, which has been discovered since Bailey's tenure, investors are confident that its potential is yet to be reached; or that it's even remotely close to being reached.
5. William McLaughlin Select Comfort (SCSS)
Select Comfort was one of the hardest hit stocks during the recession: In just two years the stock lost 99% of its value, between 2006 and 2008. But then changes were made for its stores to become more profitable and its strategy was changed to consumer-focused which has been the driving force behind the company's large growth during the last three years. I believe that McLaughlin has been instrumental, or the largest single piece, of why SCSS has returned more than 7,000% since January of 2009 including a near 140% gain in 2011. The consistently large gains from SCSS are rarely celebrated and its CEO is never discussed as one of the top CEO's within the market.
McLaughlin has made a lot of changes, as of late, in order for the company to surpass a $1 billion valuation. The company has changed its strategy to focus on the consumer and its placed an emphasis on improving the quality of the experience with its products being in-store and allowing potential consumers the opportunity to lie on the beds and "feel the difference." The in-store experience along with a consumer-focused strategy has allowed for Select Comfort to obtain a larger market share and attract younger consumers to produce higher sales. Despite the company's fundamentals and stock improving so drastically in 2011 I believe that 2012 could be a better year. Select Comfort only has a 5% market share of U.S. mattress sales and the number of stores averaging at least $2 million, per quarter, has increased by approximately 300% year-over-year which shows a store-to-store focus among management. I believe that McLaughlin has done a great job at rebuilding this struggling company and that his accomplishments of much higher sales and a shift in the company's strategy should be recognized.
4. Bob Sasser Dollar Tree (DLTR)
One of the hardest jobs of a CEO would have to be finding enough $1 products to fill a store but still return a profit; for more than 4,000 stores; which is the job that Bob Sasser has to accomplish on a yearly basis. Ever since I first walked into a Dollar Tree I immediately thought about the executives and upper management who have to find the products that can be sold for only a dollar and then return a profit after all the costs associated with the store are paid. Therefore this company impresses me every year; and it continues to grow larger under the leadership of one of the most underrated CEO's Bob Sasser.
The company's been one of the better performing stocks within the industry since Sasser's reign began in 2004. And in a competitive industry DLTR continues to outperform and grow through expansion and improved fundamentals. I anticipate DLTR's growth to continue at its current pace; because in an economy where consumers are always attempting to stretch a dollar this company offers the most bang for the buck. And with a CEO that's in charge of an executive staff who continues to find great products for such a cheap price, along with a near 50% return in 2011, this company deserves recognition.
3. Ajaypal Banga Mastercard (MA)
In this economy one of the hardest sectors to sell is financials; yet Mastercard CEO Ajaypal Banga has managed to produce record fundamentals that correlates with a record stock price in 2011. Mastercard is now the fastest growing consumer financial stock, of the large companies, within its industry because of the company's ability to implement revenue producing changes one step ahead of the competition. The industry as a whole has returned large gains over the last couple years as a result of a shift from paper money to the use of electronic use, or payments. However, Mastercard has separated itself from the competition with its global business and the growth of its emerging markets. It's estimated that more than 60% of its revenue comes from emerging markets, or countries outside the U.S., and what's even more enticing about the company is that its emerging markets is the catalyst for the company's growth. I believe that Mastercard's upside is greater than its competitors because it placed an emphasis on emerging markets as part of its growth strategy many years ago; and its CEO Banga is a large reason that the company decided to focus on oversee expansion. The company's now established throughout the globe and as the use of global transaction increase the outlook for MA will become much brighter and gains should remain consistently large, such as the near 70% gains in 2011.
2. Rajesh Shrotriya Sprectrum Pharmaceuticals (SPPI)
A good year is very important in choosing the best CEO's; but what's even more important is that a CEO positions the company for long-term sustainable growth. Spectrum Pharmaceuticals Rajesh Shrotriya has done just that, and has positioned SPPI for much larger gains than its 113% return in 2011 by creating and marketing two fast growing drugs along with two additional candidates that are near ready for FDA approval. The company's growth is among the best within the biotech industry yet 2011 began with several questions that could potentially hinder its growth. The company's fastest growing drug Fesliv had questions surrounding a potential generic which could affect its future growth, during the first half of the year. However, because of a shortage in Teva's (TEVA) generic and a patent protection until 2019 the questions were answered with a patent protection until 2019 which indicates growth should remain strong. However, the largest question of growth was surrounding Zevalin, which treats non-Hogkins Lymphoma, and a bioscan requirement that made treatment much more expensive for both the patient and the physician and discouraged the drug as a primary choice of treatment. Yet this question was answered as well when the FDA lifted the requirement for the scan, which will presumably result in faster growth now that the treatment is much more cost efficient. These two concerns have kept investors watching and listening for any developments and has resulted in increased volatility within the stock. Yet because of the company's ability to affectively promote and market its two FDA approved drugs high sales have resulted in gains; and now that speculation over future growth is no longer a question investors can buy and be confident in its future.
The stock currently trades with a market cap of less than $850 million which is less than speculative biotech companies without consistent revenue or several companies without an approved drug. Spectrum's market cap is also less than Questcor Pharmaceuticals, whose fundamentals are nearly identical except for SPPI's growth which is must faster. I anticipate 2012 being a breakout year for the stock and that because of its CEO's ability to multitask questions surrounding future sales; consistently beat expectations; and affectively finishing two clinical trials for drugs expected to be approved in 2012 Rajesh Shrotriya is by far one of the most underrated CEO's within the market, and by far the most underrated within the realm of biotechnology.
1. James Skinner McDonald's (MCD)
Just when you think McDonald's can't grow any larger the company posts the best year in its storied history and returns 30% year-to-date along with increasing its dividend. McDonald's remains a large part of American culture and its stock continues to climb despite European turmoil or fear of another recession. However, what's driving the stock to its best fundamentals is its growth in emerging markets along with its addition of new segments of revenue.
The company's growth in Europe and the Asia-Pacific region of the globe has sparked new gains in its stock and has created optimism among investors. The company's placed an emphasis in emerging markets and has managed to innovate its menu in a way so that it keeps the tradition of McDonald's yet incorporates the culture of various countries. The company's also been successful at attracting more than just the child wanting a happy meal or the college kid on a budget and now attracts adults with its McCafe services. The McCafe which is an assortment of coffee related drinks along with frozen beverages has been one of its fastest segments of growth and is showing no signs of slowing down.
The reason that James Skinner is chosen as the most underrated CEO within the market is because I'm yet to see one list that mentions him as one of the best CEO's of 2011. The company's added $23.76 billion to its market cap year-to-date which is the largest gain in its history and the company's emerging markets and new segments of growth appear to have significant room to grow. Therefore I find it difficult not to mention Skinner as one of the best CEO's in the market because not only is he the leader behind this fast growing franchise but he's positioned the company for substantial growth in 2012.