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10 Fad Stocks That Bounced Back in 2010

Deckers Outdoor (DECK)

Company Profile: Deckers Outdoor designs and sells footwear and accessories, including the popular Ugg brand.

Current Share Price: $80.65 (Jan. 6)

2010 Share Price Gain: 144%

Comeback Story: Deckers Outdoor went public in 1993 and shares remained below the $5 mark until late 2003, when demand for its line of Ugg boots skyrocketed. Shares ballooned to $50 by the end of 2007 but plunged to less than $15 during the height of the financial crisis in early 2009. By 2008, inventory levels built up, helping to precipitate the stock's decline. The Ugg boots also faced a consumer backlash. Pamela Anderson, once a celebrity endorser of the product, denounced Ugg boots after realizing they were made from animal skin. Additionally, critics labeled the boots as "ugly."

Despite these criticisms, the boots continue to sell, helping to prop up Deckers Outdoor share price. The stock high an all-time high of $87.88 in December.

"As much as I thought Ugg were a fad, they didn't totally disappear," says Michael Benoit, equity analyst at Chicago-based Talon Asset Management. "Deckers is a case where there's something to it. I would say it's a real business, it has a real brand and it's a valuable asset. The Ugg brand is worth a lot. There's real cash flow with no debt."

Jones Soda (JSDA)

Company Profile: Jones Soda produces and distributes a range of premium beverages and related products in the U.S. and Canada.

Current Share Price: $1.23 (Jan. 6)

2010 Share Price Gain: 153%

Comeback Story: Jones Soda initially gained popularity thanks to an offering of unusual flavors of soda, including blue bubble gum, red apple and crushed melon. The company boasted its strong distribution network, as its beverages were available in Wal-Mart (WMT), Starbucks (SBUX), Target (TGT) and Safeway (SWY).

The popularity of Jones Soda pushed its stock to nearly $30 in early 2007, although an epic collapse dropped the share price to 30 cents by the end of 2008. Making matters worse, the company accepted a take-under deal from fellow beverage producer Reed's (REED) in March 2010. The deal, which valued shares of Jones Soda at roughly 37 cents, was later scrapped, and a series of retail deals with Wal-Mart and Target helped the stock rebound modestly.
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