10 Best-Performing Stocks Defy Prediction

(Adds that Target may have Apple shops within its stores.)

BOSTON ( TheStreet) -- Mutual fund investors, emotionally whipped by the drumbeat of bad news for the past decade and the losses posted by some of the most respected funds, missed out on big winners.

That's because they pulled an estimated $132 billion from U.S. mutual funds in 2011, the fifth straight year of withdrawals, according to the Investment Company Institute, a trade group that's tracked the industry since 1984. After the dot-com bust of 2000 to 2002, investors again endured a crash in late 2008 that wiped more than 40% off the value of their portfolios in six months. Many burned by the dot-com crash never trusted the markets again.

This year, the sovereign debt crisis in Europe, coupled with the Middle East's political unrest, spooked investors into buying low-yielding bonds and certificates of deposit. But that came after several years in which they shifted out of funds in favor of exchange traded funds and fixed-income alternatives.

Americans may once again be doing themselves a disservice by staying out of the equity markets when they should be getting in. There is a $1.2 trillion spread between bond and equity mutual fund investing, an unprecedented level. Investors flocked to bonds in 2011, driven by Europe's woes and a U.S. downgrade. Because of the wide spread, Charles Schwab Chief Investment Strategist Liz Ann Sonders is biased toward investing in stocks versus bonds, she said this week.

Boom-and-bust periods tend to cloud investors' thinking. The worst year for mutual funds was 2008, when withdrawals reached $147 billion as the benchmark S&P 500 Index fell 37%. But that was followed in 2009 with a 26.5% jump and, then, a 15% gain in 2010 -- and many investors missed out on the rebound. That will potentially put them years behind in their 401(k)'s, as stocks tend to outperform bonds over longer periods.

Trying to detect a theme among the top-performing stocks of the decade, which swam upstream in a torrent of despair, is useless as the group is an odd lot. They range from high-tech, led by the now-ubiquitous mutual fund holding, Apple ( AAPL), to low-tech, featuring stylish handbags as represented by Coach ( COH). And then there's one most people haven't heard of: Titanium Metals ( TIE), the maker of a material used in everything from aerospace to racing motorcycles.

The top-performing stocks of the past decade ought to persuade investors to take another look at equities. After all, many investment banks and research firms are predicting gains for the S&P 500 this year.

Stating the obvious "ouch," Apple was selling for $10.95 back in 2001. It closed out 2011 at $405 -- a mind-blowing 3,758% return, and it's still on the rise. Apple is now at $422.40.

From another angle, those of you seeking recurring income ought to listen to your mother: "Never bet against the phone company" -- AT&T ( T).

That's why AT&T tops the dividend-paying list for the past decade, and it now carries a whopping 5.9% yield, almost three times that of the next-best payer, Exxon Mobil ( XOM), at 2.1%. The much-derided phone company's shares have an annual average return of 4.5% over 15 years. This is good stuff, people, in a volatile economic environment.

But if you bought even one of these 10 stocks, you'd be a happy camper, and fabled fund manager Peter Lynch, he of the Fidelity Magellan Fund's ( FMAGX) halcyon years, would be right proud of you. Lynch mentions the outsized gains of the "ten bagger" companies in his revered book on investing, One Up on Wall Street.

If you didn't, be consoled because, judging from the performance of the hired guns -- mutual fund managers -- they only got some of them right. The total return of all mutual funds over the past year, including dividends, is a loss of 0.5%, according to Morningstar. Over 10 years, it's a gain of 4.5%.

Here are the 10-top performing stocks in the S&P 500 in the decade ending 2011, ranked by total return for the period, from last to first:

10. Coach ( COH)

Company profile: Coach is a manufacturer, distributor and retailer of handbags and leather accessories in an assortment of styles and is known for its distinctive luxury brands. It sells brand-name goods, including handbags, leather accessories, business cases, footwear, jewelry, sunwear, travel bags, watches and fragrance products. It's seeing huge sales growth in China and Japan. Handbags sell for up to $420.

Share performance: up 1,186%

Investor takeout: The number of shares held by Vanguard Group and State Street, the two largest shareholders, was relatively flat in the third quarter, the latest period in which data were available from those firms.

9. Priceline ( PCLN)

Company profile: Priceline is an online-travel aggregator that offers booking services for hotel rooms, airline tickets, rental cars, cruises and other vacation packages.

Share performance: up 1,276%

Investor takeout: The company's third-quarter profit more than doubled to $9.17 per share. The largest shareholders, T. Rowe Price and Fidelity, beefed up their holdings in the third quarter.

8. Titanium Metals ( TIE)

Company profile: Titanium Metals produces titanium sponge, melted products, mill products and industrial fabrications. Users of the company's products include chemical-equipment manufacturers, industrial power plants, the military aerospace industry, manufacturers of pollution control equipment, offshore oil and gas production facilities, and sporting equipment manufacturers.

Share performance: up 1,438%

Investor takeout: SAC Capital Advisors, the biggest shareholder, added 1.2 million shares in the third quarter to bring its stake to 6.7 million.

7. Amazon ( AMZN)

Company profile: Amazon is the highest-grossing online retailer in the world, with $34 billion in net sales in 2010, or 8% of the global $415 billion e-commerce market, according to Morningstar.

Share performance: up 1,588%

Investor takeout: Capital Research Global Investors (American Funds) owns 12 million shares, or 2.7%, by far the largest shareholder, but that's after selling 1 million shares in the third quarter.

6. Cognizant Technologies Solutions ( CTSH)

Company profile: Cognizant is a provider of offshore-software development, maintenance, testing and packaged-implementation services.

Share performance: up 1,845%

Investors takeout: Fidelity owns 10% and has steadily built that stake over the past eight quarters.

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5. Range Resources ( RRC)

Company profile: Range Resources explores for and produces natural gas in the U.S. "The company focuses on unconventional plays, with large acreage positions in the Marcellus Shale, Virginia, Mid-Continent and Permian regions," Morningstar says.

Share performance: up 1,903%

Investors takeout: T. Rowe Price, the biggest shareholder by far, cut its stake by about 20% in the third quarter, bringing its holding to 2.2%.


4. Intuitive Surgical ( ISRG)

Company profile: The company develops, produces and sells a robotic system for assisting minimally invasive surgery called the "da Vinci" system.

Share performance: up 2,195%

Investors takeout: The total number of owners grew by 36% over the past eight quarters to Sept. 30, but the top 10 owners trimmed their stakes by a miniscule amount.

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3. Southwestern Energy ( SWN)

Company profile: Southwestern Energy is an explorer and producer of natural gas from Pennsylvania to East Texas.

Share performance: up 2,454%

Investors takeout: The biggest shareholder is Capital Research Global Investors (American Funds), at 5% of the total shares, and that holding remained steady with the previous quarter.


2. Cliffs Natural Resources ( CLF)

Company profile: Cliffs Natural Resources is the biggest producer of iron ore in North America, operating nearly half of total mine capacity.

Share performance: up 2,812%

Investor takeout: Capital Research Global Investors (American Funds), at 9.4%, holds almost double that of the next-largest shareholder, a stake that remained flat in the third quarter.

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1. Apple ( AAPL)

Company profile: Apple designs consumer-electronic devices, including personal computers (the Mac), tablets (iPad), phones (iPhone) and portable music players (iPod). Its iTunes online store is the largest music distributor in the world.

Price appreciation: up 3,758%

Investor takeout: The top 10 institutional investors kept gobbling away at Apple, buying 4.5 million shares in the third quarter, building their stake to 24.4%.

Target (TGT) said it is moving closer to committing to opening Appple ( AAPL)shops within its own stores, announcing a test in select stores. "We will have 25 stores in Targets with unique display and assortment," said Target spokeswoman Dustee Jenkins, who described the move as "a test," told T The Wall Street Journal today.

>>To see these stocks in action, visit the Top 10 Stocks of the Past Decade portfolio on Stockpickr.
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.