As the following list shows, company-specific opportunities — as opposed to sector trends — are often where the best performing stocks are found. For instance over the past 12 months within the S&P/ASX 300 Index (Index: ^AXKO) (ASX: XKO) the following five companies have not only provided investors with enormous returns but have done so for company-specific reasons, not a result of a general sector trend.
1. Select Harvests (ASX: SHV) is involved in almond orchards and food processing, and has increased by 271% on the back of significantly improved underlying earnings, which shot up from $9.5 million to $22.9 million.
2. Mayne Pharma (ASX: MYX) is a pharmaceutical business that just over 12 months ago acquired the US-based Metrics for US$105 million. While the benefits of the acquisition are still to be fully realised, the market is certainly pleased with the progress so far and the share price has increased by 166% in response.
3. Magellan Financial Group (ASX: MFG) has been enjoying a sector tailwind of rising equity markets, but its 147% return over the past year has predominantly been due to the outstanding fund inflows it has attracted.
4. Linc Energy (ASX: LNC) shareholders have enjoyed a 140% rise in their stock price in the past year thanks to increases in oil production and a sizable increase in reserves including Linc's oil fields in the US, which have been re-valued by over US$1.1 billion.
5. Kathmandu (ASX: KMD) – despite operating in the retail sector which overall is experiencing difficult conditions and has led leading retailers such as David Jones (ASX: DJS) to underperform the broader market rise — has managed to report record sales and boost underlying profits by 17.8% year-on-year. As a result the retailer's share price is 138% higher.
Foolish takeaway
Of course, of far more interest than what performed well in the past 12 months is what will perform well in the next 12 months! Perhaps the most important takeaway is that investors need to be alert to opportunities right across the stock market, as potential high-return investments can crop up in any sector and for many different reasons.
