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More coffee...less doughnuts
A look back at the hits (Starbucks) and misses (Krispy Kreme) in CNN/Money's stock-picking features.
December 27, 2004: 11:23 AM EST
By Paul R. La Monica, CNN/Money senior writer

NEW YORK (CNN/Money) - CNN/Money has been running a stock-picking feature since late May. The goal has been to take an in-depth look at a high-profile company and determine whether or not it was worth adding to your portfolio.

In all, we've featured 26 stocks in Stock Spotlight and that feature's predecessors, Buy What You Know? and Hot Or Cold?.

How have our recommendations fared?

Of the 26 stocks we looked at, we thought that 14 of them were worth buying. And those stocks are up, on average, 8.1 percent since being featured. Not too shabby.

Our biggest successes came in late summer. In three consecutive weeks, we had good things to say about the shares of Starbucks (Research), Pixar (Research) and Nike (Research), even though all three stocks were trading near their 52-week highs at the time.

Each has since gone on to gain another nearly 30 percent, proving that you shouldn't necessarily avoid stocks just because they've had a strong run. In each of these cases, we felt that the stocks were still trading at reasonable valuations and had healthy earnings momentum behind them to fuel more gains.

The only big bust of the bullish stock picks was the very first profile: Krispy Kreme (Research). At the time, we thought the doughnut maker's stock was a bargain because it had already been pummeled following several earnings warnings.

That argument, it turns out, had as many holes in it as a dozen Original Glazed doughnuts. Shares of Krispy Kreme have plunged 41 percent since then.

Turning our attention to the 12 stocks that we panned, only four have declined in value since we wrote about them while one is flat. But the average gain for these stocks is just 3.5 percent.

We were correct to point out in June that shares of Coca-Cola (Research) would lose some fizz and the Gap (Research) would stumble after a fashionable start to 2004. Those two stocks have each fallen nearly 20 percent.

And a negative take on Pfizer (Research) in October was prescient as well. Shares have fallen 9 percent since that story.

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We were worried that Pfizer, which had already taken a tumble following Merck's withdrawal of its anti-arthritis drug Vioxx from the market after studies showed increased risk of heart attacks, would face similar health concerns with its pain-relieving medications Celebrex and Bextra. Pfizer has since pulled ads for Celebrex.

Our first two bearish stock picks backfired on us, however. Shares of Scholastic (Research) have soared 30 percent since early June. We had thought that the company was too dependent on Harry Potter for its success and that the absence of a new book in that series in 2004 would hurt the company.

And we bet against controversial retailer Abercrombie & Fitch (Research) in early June as well, only to see its shares surge 27 percent.

All in all though, we have done a decent, albeit not spectacular, job with our stock picks. We aim to do even better in 2005 and hope that you've enjoyed reading our analysis.  Top of page




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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.