NEW YORK (FORTUNE) - We're pleased to report that the FORTUNE 40 turned in a stellar year. From June 24, 2005, to June 2, 2006, our diversified group of small, mid-sized, and large domestic and international equities returned 17 percent. The S&P 500 gained 10 percent over the same period.

In fact, last year's portfolio was so successful that we used largely the same methodology to choose this year's stocks. Some of our winners, like top performer Lincoln Electric (Charts) - up 95 percent - have risen so much that they no longer meet the requirements of our screens. (Lincoln is off in part because it has grown too large to qualify for our small-cap category.)

Other winners - such as Petroleo Brasileiro (Charts), Brazil's state-owned oil company, up 84 percent - remain on, despite their share gains, because their prospects are still so strong.

And, of course, we've dumped some losers, like our worst dog, Boston Scientific (Charts), which tumbled 25 percent, thanks to a disastrously expensive $27 billion takeover deal for Guidant (after an epic bidding war with Johnson & Johnson (Charts) that, frankly, we wish it had lost).

Here is a complete list of last year's picks.