Stubborn Little Winners

Today we’re going to salute some little guys who wouldn’t give up.  Small (er) cap stocks that refused to quit and have made their true-believer shareholders money this year, in one of the worst environments imaginable.

Based on Closing Prices as of 7/14/2009

What these names have in common is that they all are consumer-oriented companies, 4 of them are engaged in the entertainment business.

These are companies that were written off as roadkill; victims of the retrenching consumer amidst the atrocious employment situation.  This logic was easily accepted as fact by the market and in most cases, the stocks were beaten down to within an inch of their lives. 

But then something funny happened:  The companies refused to quit.  They stubbornly reported positive news when no one thought they could and their share prices went a lot higher.

 
Marvel Entertainment (MVL) – Marvel is still riding the wave of success from the smash hit Iron Man film and the expectations for it’s forthcoming sequel.  Even their films that weren’t huge hits, like the latest Hulk movie, have kicked some profits in to Marvel’s bottom line.

IMAX (IMAX) – The large format film and theater company is one of the most unlikely winners I can think of.  Here’s a company beset by competition, encumbered with a bizarre double CEO situation, based in Canada and laden with debt.  But boy, they sure do make a splash with every IMAX release.  The kids line up to see Batman and the Transformers on their monster screens worldwide.  IMAX was also able to place a secondary stock offering this summer, not an easy feat. 

Tivo (TIVO) – With every court decision over their DVR patent, Tivo grew stronger over the last year.  Major partnerships with cable companies to embed Tivo’s technology into their set-top boxes have been greeted with rallies for the stock as well.  Once written off as a victim of copycats, Tivo has reestablished itself as the leader in Digital Video Recording capability.

Green Mountain Coffee (GMCR) – Are we trading down from expensive (and burnt-tasting) Starbucks coffee in this, the Greatest Recession?  You bet your arse we are.  Barron’s has questioned the company’s revenue recognition policies, but GMCR’s fans have taken the stock way higher, it recently split from almost $100 a share recently.  A monster short position in the name certainly hasn’t hurt.

Ford (F) – This is an amazing story.  Chrysler and GM filed for bankruptcy this year, along with a ton of auto-parts suppliers and US dealerships.  So what does Ford do?  it runs from $1 to $6!  The ultimate Detroit lottery ticket managed this feat partially as a reult of CEO Alan Mullaly‘s prescient move to raise money before the credit crisis, giving Ford more flexibility to weather the storm.

Netflix (NFLX) – What does one do for entertainment when the money isn’t pouring in and a vacation is out of the question?  One rents DVDs.  Netflix has destroyed Blockbuster over the years and their cheap monthly packages allow people to escape at the right price.  Recent rumors of a takeover from Amazon.com haven’t hurt either.

Palm Inc. – The Little PDA Engine That Could released the Centro, a $99 smartphone as an entry level competitor to the iPhone.  They followed this up with the Palm Pre, one of the hottest tech gadgets of the year, a smartphone that has singlehandedly resurrected Palm’s brand and probably saved Sprint (it’s carrier) as well!

Congratulations to the Stubborn Little Winners and their shareholders.

Full Disclosure:  I currently manage accounts that are long PALM, IMAX and F.  My commentary above is not an endorsement or invitation to buy or sell any securities.  Please do not trade or invest based on anything you read here, see my Terms & Conditions page for a full disclaimer.