What It Took to Win

Get Jim Cramer's picks for 2006.

In 2005, fortune favored the brave.

Stock investors who played it safe in 2005 had lackluster results, with the S&P 500 headed for a 3.8% gain for the year -- well below the current 4.4% yield on the 10-year Treasury bond. Meanwhile, the stars were aligned for risk-takers who made the boldest bets and lived to tell about them.

The get-rich-quick crowd found the stock market's monster returns in drug development, oil speculation and energy drinks, among other things.

Two obscure drugmakers, ViroPharma (VPHM - Cramer's Take - Stockpickr) and Myogen (MYOG - Cramer's Take - Stockpickr), staged eye-popping rebounds as their prospects improved after suffering rejections in the government's high-stakes drug-approval process.

Elsewhere, a little-known oil and natural gas company, GMX Resources (GMXR - Cramer's Take - Stockpickr), became a gusher as oil prices skyrocketed. And with Congress calling for oil companies to build more refineries, Dynamic Materials (BOOM - Cramer's Take - Stockpickr) caught a bid, not all of which can be attributed to its ticker symbol.

A better-known moonshot was Hansen Natural (HANS - Cramer's Take - Stockpickr), which, with its caffeine-laden drinks, took on Coke (KO - Cramer's Take - Stockpickr) and Pepsi (PEP - Cramer's Take - Stockpickr). A large band of speculators went along for the ride.

Swelling

Shares of ViroPharma vaulted almost 500% this year as demand for Vancocin, its government-approved antibiotic that treats inflammation of the mucus membrane of the intestine, increased dramatically. The company announced three separate double-digit price increases on the drug this year, ratcheting up sales. It's expected to post an annual profit of 85 cents a share for the year -- its first profitable year on the books.

ViroPharma bought the rights to Vancocin from Eli Lilly (LLY - Cramer's Take - Stockpickr) in late 2004, after a clinical setback for a would-be cold treatment sent its shares into the single digits.

"There is a public relations issue with raising the price substantially for a product that is used to treat serious infections," said Adam Cutler, analyst with JMP Securities. "It wasn't worth it for a huge company like Eli Lilly to take on that public relations challenge, but it has definitely been worth it for a little drug discovery firm like ViroPharma."