New names lead stock winners’ list

Market lags all-time high, but some companies stand out

Record profits and never-beforeseen cash piles may be sloshing around big companies, but such riches are lost on investors waiting for their stocks to regain record levels.

Despite a powerful two-day run, topped off by Thursday’s 1.4% rally, the market remains a distant 10% from its all-time high. Investors who look more closely, though, see a group of new leaders that are already setting new high-water marks.

Stocks such as coffee-seller Star- bucks, paint-maker Sherwin-williams and restaurant Chipotle, plus 72 others in the S&P 500, are either at all-time highs or just 5% away, according to a USA TODAY analysis of data from S&P’S Capital IQ. These leading stocks give investors hope that the broad market, despite its slog to return to its 2007 glory, will eventually see new highs, too.

“Fundamentals are already at alltime record highs,” says Doug Cote, strategist at ING Investment Management. “It’s the (stock) prices that are lagging.” More than 300 stocks in the S&P 500 are still 20% or more from their all-time highs.

The stocks leading the charge to record territory fall into several categories, including:

-Players in the food and restaurant rebirth. Investors are riding the boost in consumers going out or spending more on food. Starbucks and Chipotle hit new all-time highs Thursday. Health food seller Whole Foods Market and fast-food chain operator Yum Brands are closing in on theirs. Starbucks benefits from strong coffee consumption, plus compelling growth plans, says Sharon Zackfia of William Blair. Chipotle, she says, has yet to tap most of the country and world.

-Magnets of growth. Some companies are finding themselves well positioned to grow despite the sluggish economic recovery. Sherwin-williams said first-quarter earnings would beat estimates due to strong demand for paint from professionals, says Jeffrey Cannon of Morningstar. Both Visa and MasterCard benefit as plastic is used to pay

for more goods, says David Darst of Guggenheim Securities. And Intuitive Surgical, maker of robots used in operations, is winning over hospitals with lower-cost procedures and shorter recoveries, says Jose Haresco of JMP Securities.

-Caterers to the frugal consumer. Focusing on consumers trying to stretch a dollar continues to pay off with stocks such as Dollar Tree, Family Dollar and Ross Stores. Dollar Tree has successfully kept enticing consumers, says Joan Storms of Wedbush Securities. O’reilly Automotive benefits as consumers keep cars longer, says Daniel Hofkin of William Blair.

Such leadership shows the market can pierce new highs, if investors are patient. “This market is just regrouping,” ING’S Cote says.