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Winners and Losers: US Airways (LLC) and Sterling Financial (STSA) make the list

Today's Financial News - Posted October 1, 2008

The third quarter is in the books. There were plenty interesting names on the winners and losers list. Some of the companies will surprise you.  US Airways (NYSE:LLC) made the list, but not where you think.

By Andrew Snyder

Baltimore – (TFN): It is the start of a new day, a new month, and most importantly, a new fiscal quarter. After one of the most turbulent three-month periods in Wall Street history, investors are glad to put the third quarter of 2008 into the history books. It was a period filled with ups and downs, business failures, and one surprise after another.

Even now that the third quarter is behind us, it is still dishing out surprises. As lists of the period’s biggest winners and losers are published, Main Street investors are astonished by some of the names and industries making their way to the list.

What if I told you there was an abundance of energy-related companies on the winners and losers list? In a quarter when crude prices were close to record highs and the economy was just off its peak, almost everybody would bet these companies were near the top of the winners list.

Nope, all sorts of energy companies lost a lot of ground.

It was oil exploration and drilling companies like Quest Resource Corp (NASDAQ:QRCP) with Q3 share price losses of over 76% that kept the losers list filled with teeth-clenching pain.  After reaching a 52-week high in mid-June, the company entered the latest quarter with shares trading for $10.86. Yesterday, they sold for $2.66.

The losers list is filled with energy companies in similar situations. There are lots of firms from the biodiesel, ethanol and alternative fuels industries, but oil exploration companies led the losers. After crude prices hit a record high and made a quick retreat, investors began to take their profits and run. It forced share price valuations across the industry towards horrid lows.

Some surprising winners

What if I told you there was a slew of financial companies on the quarter’s winners and losers list? Again, in a period filled with bank failures, bankruptcies, and emergency fire sales, a reasonable person would assume banks were amongst the biggest losers.

Unfortunately, the reasonable folks are wrong again. Some of the nation’s banks made terrific leaps.

Sterling Financial (NASDAQ:STSA) led the bulls with gains of over 270% since July 1. Ever since the company announced its second-quarter earnings in mid-July, share price has been unstoppable.

After climbing from $2.50 per share at its mid-July low to over $14 today (a run of over 450%), analysts are finally starting to view Sterling as overpriced. Even with a few downgrades, do not be surprised if this stronghold continues its climb throughout the next few months, especially with some help from a government bailout.

There was another surprise winner close to the top of the biggest-gainers list, US Airways Group (NYSE:LCC). Investors that bought shares of the troubled airline at third-quarter lows and sold at the highs cashed in for gains of over 430%.

Even if you were not so lucky as to time your investment perfectly, the official Q3 gain rang in at 141%. Not bad for a company in an industry that is sinking fast.

As we embark on the fourth quarter, a period that is undoubtedly going to be just as rough as the past three months, we will see more surprises from the market. It is the savvy investor that can see those surprises coming and take advantage of their profit opportunities while nobody is looking.

Already this week, we have seen plenty of opportunities. As the news unfolds, we will have more and more shots at success. If you pay attention and do your homework, the fourth-quarter winners list could be a snapshot of your portfolio.


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Posted by Andrew Snyder · Filed Under US Stocks and Markets 

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