Market's 10 biggest winners, losers of 2012

If someone had predicted a few years ago that two of the top-performing stocks in the Standard & Poor's 500 Index ($INX) in 2012, including the top gainer, would be homebuilders, the investing world would have thought he or she was crazy. But times change, as does conventional investing wisdom, sometimes quite rapidly.

Take PulteGroup (PHM) and Lennar (LEN), the first- and fifth-place finishers. Both homebuilders survived the pounding the sector endured from the worst economic slowdown since the Great Depression.

Not long ago, the housing market seemed to be a bottomless pit of despair. Industry expert Robert Schiller was quoted in Reuters in April as saying that the market would need a generation or more to recover from its downturn. Since then, the rebound in housing has continued to gain momentum. New housing starts recently hit a four-year high, fueled by record low interest rates and rising consumer confidence, according to Bloomberg. PulteGroup posted a 166.4% gain this year as of Wednesday while Lennar surged 93.6%, according to data from S&P Capital IQ.  (The top and bottom performers are reprinted below)

Second-place winner Sprint Nextel (S) has been in Wall Street's doghouse for years. It's been called "the poor stepchild of the wireless service provider business" by 24/7 Wall St., compared with larger rivals AT&T (T) and Verizon (VZ). The website last year called on the Overland Park, Kan., company to fire CEO Daniel Hesse, who has struggled to stem customer defections, control costs and maintain profits. Hesse's numerous critics probably didn't expect him to sell 70% of his company to Japan's Softbank for more than $20 billion. Under terms of the deal, Sprint will retain Hesse at his current job. Sprint's shares are up 144.9% for the year.

Last October, shares of appliance maker Whirlpool (WHR) had their biggest decline since 1987 after the company slashed its earnings outlook and announced plans to cut 5,000 jobs. An analyst was quoted by Bloomberg News as saying that Whirlpool was "on fragile ground financially." Fast forward a year or so, and the picture has changed dramatically. In April, the company reported better-than-expected​ quarterly earnings as price increases and cost cuts paid off. Meanwhile, sales gains in emerging markets are helping offset weaknesses in other regions, such as the U.S. and Europe. Whirlpool was the third best performer in the S&P 500 in 2012 with a gain of 166.4%.

In February, Tim Beyers of the Motley Fool warned investors to "prepare to be disappointed" by Expedia's (EXPE) earnings, noting that the company has been shy of profit estimates in each of the last four quarters by at least 14 cents per share while its rivals have beaten Wall Street expectations. A few months later, Expedia shares rose to their highest level since 2005 after the company posted better-than-expected​ quarterly earnings. Beyers wasn't the only one caught by surprise by Expedia's resurgence. Lloyd Walmsley, an analyst with Deutsche Bank. was quoted by Blomberg as saying in a note that "clearly things are improving faster than we anticipated on the booking side." Expedia's year-to-date gain topped 113%, the fourth best in the benchmark index.

Will the bottom 10 performers in the S&P 500 in 2012 rebound in 2013?  That's tough to say, but Wall Street hasn't abandoned all hope for many of these stocks. Shares of for-profit college operator Apollo Group (APOL), the biggest laggard in the benchmark, fell 62.4% this year amidst a government crackdown on the industry. The average 52-week price target on the stock is $31.70, about 55% above where it recently traded. 

Advanced Micro Devices (AMD), which plunged more than 54% this year, may rise another 13% next year. Keep in mind that the chipmaker's shares are worth about $2.43, so these percentage gains may be somewhat exaggerated. Wall Street sees better times ahead other beleaguered stocks such as Best Buy (BBY) (13% potential upside) and J.C. Penney (JCP) (4.96%).  

The lessons that investors can learn from this data are many. Warren Buffett, perhaps history's greatest investor, once urged people to "be fearful when others are greedy and greedy when others are fearful." People need to make up their own minds about stocks because conventional wisdom is by its very nature. . .conventional.

Below is the chart of the largest S&P 500 gainers and losers this year. (Thanks to S&P Capital IQ for the data.)

Jonathan Berr is a former contributor to 24/7 Wall St. and The Motley Fool. He does not own shares of the listed stocks. Follow him on Twitter @jdberr

Top 10 Standard & Poor's 500 gainers and losers in 2012
Winners
Company			Ticker			Chg. %
PulteGroup			PHM			187.6
Sprint Nextel			S			135.0
Whirlpool			WHR			112.0
Expedia			EXPE			105.3
Bank of America			BAC			102.3
Lennar			LEN			94.8
Marathon Petroleum			MPC			87.4
Tesoro			TSO			85.7
Seagate Technology			STX			84.7
Gilead Sciences			GILD			77.5
Losers
Company			Ticker			Chg. %
Apollo Group			APOL			-62.4
Advanced Micro Devices			AMD			-54.1
Best Buy			BBY			-50.5
Hewlett-Packard			HPQ			-45.6
J. C. Penney			JCP			-43.5
Cliffs Natural Resources			CLF			-43.3
Pitney Bowes			PBI			-42.3
Allegheny Technologies			ATI			-37.6
Tyco International			TYC			-37.4
Exelon			EXC			-31.6
Data as of Dec. 26 close. Source: S&P Capital IQ

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