Home builder PulteGroup tops 2012 stock winners list

NEW YORK -- Investors who bought housing stocks nailed it in 2012.

Signs of a housing recovery that may finally stick catapulted home builder PulteGroup to the top of the performance charts. Pulte shares nearly tripled, rising 188%, ranking it No. 1 out of the 500 large-company stocks that make up the Standard and Poor's 500-stock index.

Pulte, which sells homes under the brands Pulte Homes, Del Webb and Centex, and also has a financial arm that issues home loans to buyers, has benefited from data point after data point that points to a real estate market on the rise.

Home sales, housing starts and prices all improved in 2012, just as the number of foreclosures fell. In November, housing starts hit 861,000, the second-highest level since July 2007. Pending home sales rose to a level not seen since 2009-2010, when the government was offering incentives to first-time home buyers. The more solid foundation in the housing market has also done wonders to rebuild shares of Lennar, the nation's largest home builder. Lennar, which ranked sixth best in 2012 returns, soared nearly 97%.

Other big winners in 2012 include four more stocks that doubled. Sprint Nextel, the nation's third-largest wireless carrier, rallied 142%. The telecommunications company benefited from the massive shift to smartphones and other hand-held communications devices. Sprint Nextel is the last of the major wireless players to offer unlimited data plans, which is boosting its smartphone sign-up subscriptions.

Whirlpool, which makes durable, big-ticket items such as refrigerators, freezers and dishwashers, gained 114%. The maker of consumer discretionary products benefited from an improving jobs market, the housing rebound and income gains for consumers. Similarly, online travel service provider Expedia also got a boost from the rebounding economy, as well as travelers' willingness to spend money on non-discretionary things such as family vacations. Its shares rose 112%.

Bank of America rose 109%. The bank's big move partly reflects a rebound from a steep 58% drop in 2011. It also profited from the improving housing market, which has boosted consumer confidence and reduced the number of underperforming and underwater mortgages. The financial sector was the best-performing of the 10 sectors in the S&P 500, gaining nearly 25%.

Investor optimism rose in March 2012 when Bank of America passed a bank stress test issued by regulators. That raised hopes that the "too-big-too-fail" bank, which now sports a measly 0.4% dividend yield, will get the OK from the government in 2013 to boost its dividend and buy back shares of its stock, both of which are investor-friendly.

But for every big winner on Wall Street there was a big loser.

Apollo Group topped the loser list in the S&P 500. The for-profit education provider fell 61%. The government has targeted Apollo and other for-profit educational institutions because of the high debt levels of graduates and a relatively poor employment track record for for students.

Computer chip maker Advanced Micro Devices tumbled 56% amid a tough environment for traditional PCs in a tech world shifting rapidly to smartphones and tablets. Shares of electronics retailer Best Buy plunged 49% as it struggled to compete with online sales and shoppers' increasing use of the Internet to comparison shop for the best deals. Another victim of the rapid shift toward hand-held devices and tablets was computer market Hewlett-Packard, whose shares fell 45%. J.C. Penney, the department store retailer, also suffered steep declines, losing 44%, amid investor concerns that its new pricing strategy would not be a cure-all for declining sales and lack of momentum in the hyper-competitive retail world.

USA Today