10 Best-Performing Stocks in Three-Year Bull Market (Update2)

(Story updated to add reference to Select Comfort competitor Tempur-Pedic International.)

BOSTON (TheStreet) -- The worst bear market since the Great Depression ended three years ago March 9. Since then, stocks have been on a tear, with the Dow Jones Industrial Average, the Nasdaq and the S&P 500 soaring at least 95%.

As could be expected, some shares rose in lockstep with those indices, while others rocketed and fizzled, and others still continue in their ascent.

In order to find the best of the last group, I screened Morningstar data for companies with solid financial fundamentals, a market value of at least $250 million and a three-year average annual return of 200% or better.

Surprisingly, there is only one technology company in the group, and the rest are a smorgasbord, including a yoga-wear retailer, a Las Vegas casino developer and a Canadian oil driller that went all the way to New Zealand to get at black-gold deposits.

And who could have guessed how badly people want a good night's sleep and are willing to part with several thousand dollars to sleep tight? Well, two mattress makers are among the top performers in the past three years and while one is on this the list, the other, Tempur Pedic International ( TPX), with a three-year return of 176%, just missed.

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The 10 stocks we found are summarized below, and ranked in inverse order by the number of analysts' "buy" ratings. Be cautious, though. They've had their fair share of volatility, and, of course, any of them could underperform the broader market at any time.

10. TAG Oil ( TAOIF)

Company profile: Tag Oil, with a market value of $547 million, is a Canadian company producing and exploring for oil and natural gas in oil shale in New Zealand using the fracking technique.

Investor takeaway: Its shares are up 43% this year and have a three-year, average annual return of 318%. No U.S. analyst coverage is available, but hedge fund manager Elliott Associates, with $15 billion in assets, is the biggest stakeholder at 12%, followed by Fidelity and Fidelity Canada, with a combined 7%. Tag Oil said today that it upped its capital expenditures by $66 million to expand oil and gas drilling at its company-owned fields in New Zealand, because its efforts have been so successful.

For its third quarter ended Dec. 31, the company reported operating cash inflow of $4.8 million, compared to an outflow last year, and net operating income for the nine months of almost $11 million. It's expected to earn 19 cents per share in the current fiscal year, and that that will rise to 53 cents in 2013.

9. Dollar Thrifty Auto Group ( DTG )

Company profile: Dollar Thrifty, with a market value of $2 billion, owns, operates and franchises car rental operations throughout the U.S., Canada and abroad.

Investor takeaway: Its shares are up 12% this year and have a three-year, average annual return of 368%. Analysts give them two "buy" ratings and four "holds," according to a survey of analysts by S&P.

Dollar Thrifty had a run-up of 2,250% in 2009, but don't get too excited about that as it was almost delisted at the end of 2008 for not meeting its market value benchmark and traded as low as 60 cents a share before new management began to turn it around. It also benefited from a takeover attempt in 2010 from competitor Hertz ( HTZ). Expect future share-price performance in line with that of its industry.

8. Pharmacyclics ( PCYC)

Company profile: Pharmacyclics, with a market value of $1.8 billion, is a developer of pharmaceuticals used to treat certain cancers and cardiovascular disease.

Investor takeaway: Its shares are up 73% this year and have a three-year, average annual return of 210%. Analysts give them three "buy" ratings and four "buy/holds," per S&P. The drug-focused hedge fund Baker Brothers Advisors owns the largest stake, at 11.7% at year-end, followed by Capital World Investors, with 6.7%.

7. Mitek Systems ( MITK)

Company profile: Mitek, with a market value of $302 million, is the developer of software used for image recognition, used in check and document processing, and forgery detection. Its customers are financial services, insurance, and health-care firms, as well as government agencies.

Investor takeaway: Mitek's shares are up 74% this year and have a three-year, average annual return of 401%. Analysts give them three "strong buy" ratings, according to a survey of analysts by TheStreet. JMP Securities initiated coverage last week with an "outperform" rating and a $17 price target, while Piper Jaffray started coverage with a "neutral" rating with a $13 price target.

The shares are now at $1

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2.58. Allianz Global Investors Capital is the largest institutional investor, with a 5.7% stake, followed by Fidelity, at 3.7%.

6. Jazz Pharmaceuticals ( JAZZ)

Company profile: Jazz Pharmaceuticals, with a market value of $2.8 billion, is a specialty-pharmaceutical company that develops and markets medical products in the fields of neurology and psychiatry.

Investor takeaway: Its shares are up 27% this year and have a three-year, average annual return of 329% -- and have accomplished that with a relatively steady climb. Analysts give its shares three "buy" ratings, and four "buy/holds," according to a survey of analysts by S&P.

Analysts estimate Jazz Pharmaceuticals' earnings will grow by 23% to $4.22 per share in fiscal 2012. The company said a week ago that some of its shareholders announced they will sell 7.9 million shares, but that won't affect the number of shares outstanding. Still, that can't be good for share prices in the near term.

5. Select Comfort ( SCSS)

Company profile: Select Comfort, with a market value of $1.8 billion, makes air beds and other sleep-related products. The company's mattresses have adjustable firmness levels and range in prices up to $2,600.

Investor takeaway: Its shares are up 43% this year and have a three-year, average annual return of 437%. The stock rose 2,508% in 2009.

Analysts give Select Comfort's shares four "buy" ratings, two "buy/holds," and two "holds," per S&P. For fiscal 2013, analysts estimate that earnings will grow 25% to $1.72 per share.

4. Keryx Biopharmaceuticals ( KERX)

Company profile: Keryx, with a market value of $299 million, acquires and develops products for the treatment of diseases, including diabetes and cancer.

Investor takeaway: Its shares are up 58% this year and have a three-year, average annual return of 232%. Analysts give them five "buy" ratings, and three "buy/holds," according to a survey of analysts by S&P. Its shares are trading at $4.22.

Keryx popped 17% last week after a Seeking Alpha author said upcoming Phase III data for the company's cancer-fighting agent Perifosine should be positive. However, TheStreet's Adam Feuerstein published a critical review of the Seeking Alpha article.

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3. Pier 1 Imports ( PIR)

Company profile: Pier 1 Imports, with a market value of $1.9 billion, is a retailer of decorative accessories, furniture, housewares, and seasonal items imported from more than 50 countries. Pier 1 has over 1,000 stores.

Investor takeaway: Its shares are up 23% this year and have a three-year, average annual return of 386%. Analysts give them seven "buy" ratings, one "buy/hold," and five "holds," according to a survey of analysts by S&P.

S&P has its shares rated "hold," and said comparable-store sales in February rose an impressive 10.3%, versus its 9% projection. "Merchandise margins remained strong throughout the quarter, and the mild winter weather also aided sales."

The ratings firm raised its fiscal 2012 (February year-end) earnings outlook by 2 cents per share to 94 cents.

2. Lululemon Athletica ( LULU )

Company profile: Lululemon Athletica, with a market value of $8 billion, is a specialty retailer and designer of upscale athletic apparel for women, with a focus on yoga-inspired merchandise. It is also branching out into general fitness and men's apparel.

Investor takeaway: Its shares are up 52% this year and have a three-year, average annual return of 216%. Analysts give them nine "buy" ratings, four "buy/holds," 10 "holds," and one "weak hold," according to a survey of analysts by S&P.

For fiscal 2013, analysts estimate its earnings will grow by 26% to $1.58 per share. Morningstar says the firm "is one of the most productive retailers in the industry, generating about $1,700 in sales per square foot in 2010."

But, by the same token, Lululemon could lose market share as big, brand-name retailers have begun to push their own lines of yoga-inspired clothing. And, ultimately, it could suffer if yoga wear turns out to be a fad, but there are no signs of that now.

1. Las Vegas Sands ( LVS)

Company profile: Las Vegas Sands, with a market value of $40 billion, is the world's largest operator of integrated resorts encapsulating casinos, hotels, entertainment, food and beverage, retail, and convention center operations. Its ventures span from Las Vegas to Macau, China.

Investor takeaway: Its shares are up 29% this year and have a three-year, average annual return of 215%. Analysts give them 14 "buy" ratings, 10 "buy/holds," and three "holds," according to a survey of analysts by S&P.

For fiscal 2012, analysts estimate it will earn $2.60 per share and that that will grow by 20% to $3.11 per share next year. There's a gamblers saying of "never bet against the house," and that's been true here. Asia has been its ace in the hole, as growth there has been rampant, but the company is dependent on continued growth in the economy there as Asia contributes 85% of its revenue.

But Morningstar analysts say the company's reputation for successfully developing mega-resorts puts it in a position to get "future licenses in countries that we expect to legalize casino gambling in the next several years, including Japan, Taiwan, and South Korea."

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-- Written by Frank Byrt in Boston.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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