8 stocks that could have made you rich
In a rocky market, keep this in mind: Some stocks go up, and some go way up. Here are 8 that rose from 600% to more than 8,000% during the economic downturn of the past few years.
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Trade gain: 8,150%
What's your sleep number? How about 8,150%? That's how much shares of Select Comfort (SCSS), which sells adjustable firmness Sleep Number beds, advanced from late 2008 through Monday of this week. A $3,000 investment in this stock at the 2008 closing price of 25 cents a share would now be worth more than a quarter of a million dollars.
Those are comfy returns. But are Sleep Number mattresses that popular? Well, a lot of people like them, because firmness can be adjusted on each side. The company has been posting sales gains 25% to 30% all year. "We're demonstrating to market that we have honed our growth formula," says Select Comfort CFO Wendy Schoppert.
But that's only part of the story of how this stock could have made you rich over three years. Here's the other. Steady profits at this company from 2002-'07 turned into losses in 2008 as the recession left consumers hiding under the covers. Given the company's debt levels, investors worried it might go bankrupt, and they kicked this stock out of bed. That pushed this stock to as low as 19 cents a share in December 2008.
In response, Select Comfort cut jobs, capital spending and advertising, and it closed stores. These measures helped the company return to profitability in 2009 as consumers came back to life. Investors kept bidding up the stock this year on expectations of more growth.
Key investing takeaway: Investing in turnarounds by troubled companies with solid products can pay off big. But patience is key. At 50 cents a share, this stock looked cheap in November 2008 -- but it dropped an additional 50% over the next four months before taking off.
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