The Faster They Rise ...
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Chasing hot stocks can be surprisingly dangerous, as a new study by Boston-based money manager John Dorfman of Dreman Value Management demonstrates. He looked at the 10 hottest stocks of 1996 and found that these scorchers have turned icy. In the last 12 months, this portfolio would show losses in nine of its 10 components. Not a single stock in the group beat the Standard & Poor’s 500-stock index, a blue-chip benchmark. The average result would be a loss of 43.5%. Since the S&P; 500 was up 19.2% during the same span, this portfolio would have trailed the market by more than 62 percentage points.
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Tues. 1996 % chg. in Company Ticker close % gain last 12 mos. TSR TSRI $8.00 +967% -42.9% Viasoft VIAS 4.00 +696 -71.8 Zitel ZITL 1.53 +640 -78.2 Saba Petroleum* SAB * +562 -70.1 UTI Energy UTI 15.00 +529 -1.6 ISG Intl Software SISG 8.94 +517 -3.4 Fed. Agri. Mort. FAMCK 66.56 +515 +11.8 Finish Line FINL 10.69 +463 -62.5 Centennial Tech. CENL 0.72 +451 -55.7 PMR PMRP 3.88 +435 -63.5
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*Saba Petroleum is now owned by Greka Energy. Shown is 12-month performance ending March 29, 1999.
Source: Bloomberg News
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