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Market Update

Our Take on 2002's Best-Performing Stocks

Most of these stocks look overvalued.

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With the market down another 20% so far in 2002, it hasn't been a fun year for investors who held individual stocks. Far more stocks have had losses than gains this year, and giant names such as General Electric (GE) have caused colossal losses in shareholder value. With the bear market dragging on, only a few stocks in Morningstar's coverage universe have posted notable gains for the year.

When we wrote this feature last year, the 10 best-performing stocks on our coverage list all had triple-digit gains. This year, only two of the 10 were in the triple-digit category. But while this year's winners showed more modest gains, we still think caution is warranted. If you were fortunate enough to own any of these stocks in 2002, give yourself a pat on the back. But with most of the year's top-performing stocks (listed below) currently selling above Morningstar's estimates of their fair values, we'd wait for the prices to decline before making any new investments. To find out more about our take on 2002's standouts, Premium Members can click on the Analyst Report links below. 

 Top-Performing Stocks in 2002*
 

2002 Return
(%)

Fair Value
Estimate ($)
Morningstar
Rating
We're not sure the recent surge in arts and crafts activities will last, so we'd wait for a 40% margin of safety to our fair value estimate for Jo-Ann Stores (JAS.A) before investing. Read the full  Analyst Report. 246.9 21
While we're impressed with the way Amazon.com (AMZN) is executing its game plan, we'd be wary of paying too much for it. Read the full  Analyst Report. 102.7 13
Boston Scientific's (BSX) shares have gotten ahead of the company's improved growth prospects, and we would look elsewhere. Read the full  Analyst Report. 83.2 34
Providian Financial (PVN) is a highly risky stock with no economic moat, so investors should look for a wide margin of safety. Read the full  Analyst Report. 81.1 9
The list of reasons to shun PacifiCare Health Systems (PHSY) stock remains a long one. Read the full  Analyst Report. 81.0 14
Expedia (EXPE) is a premier vendor of airline tickets and hotel rooms, but the online ticket industry is a game that leads to inexorably lower prices. Read the full  Analyst Report. 68.5 53
We believe in Quiksilver's (ZQK) surfwear brands but would carefully test the waters before jumping on the shares. Read the full  Analyst Report. 58.7 27
Chico's FAS (CHS) is a powerful growth and profit engine that has shown few signs of slowing. Read the full  Analyst Report. 58.7 18
SanDisk's (SNDK) growth prospects are strong but already reflected in the stock, in our opinion. Read the full  Analyst Report. 56.7 16
Mandalay Resort Group (MBG) has big plans to capitalize on the Las Vegas Strip's popularity. Read the full  Analyst Report. 42.3 29
* Table includes the top-performing stocks in Morningstar's coverage universe.
Data is through 12-20-02.

Morningstar Analysts does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.