(Nasdaq: AMZN) +74.6%

Amazon.com has been downright cruel to Wall Street analysts. First, there was former Merrill Lynch analyst Henry Blodget's misfortune, then onetime Lehman Brothers convertible bond researcher Ravi Suria's controversial call. All the more reason to give credit to Jeetil Patel of BT Alex. Brown, now Deutsche Bank Securities, who has managed to get the shares mostly right.

Blodget, while working at CIBC World Markets, became forever identified with Internet excess when in December 1998 he predicted that Amazon's shares, already at $240, would exceed $400. They blew past that goal (presplit) the next month, hitting $630 presplit ($105 postsplit) in April 1999, not long after Blodget landed a job at Merrill. The stock peaked in December 1999, however, at $640 presplit ($107 postsplit) and lost half its value by the spring of 2000; by late 2001 (when Blodget resigned), it was off its high by more than 90 percent. Suria caused a ruckus in June 2000 when he said Amazon risked running out of cash; the stock's nosedive continued, but the company never ran out of money.

Patel, now 29, was more measured, rating Amazon market perform in January 2000 at $70 (or about $420 before the two 1999 splits). The stock, says the analyst, "was likely to correct, since there was so little clarity about its earnings potential." It did, but Patel upgraded Amazon to buy at $16 in April 2001 based on the company's longevity, its stature in e-commerce and its proprietary technology. "Toys R Us had joined with Amazon just before the holiday season, and that relationship was starting to show promise," says Patel.

Although the stock slipped to $11 by 2001's end, it jumped 75 percent in 2002 to almost $19 -- up 20 percent since Patel's recommendation. That doesn't compare to Amazon's tenfold increase in 1998, but the gain was based on much sounder financials.

More gains are still likely, says Patel, citing Amazon's partnership with Target Corp. stores, among others, and its 31 million customers. With 2002 net losses down 75 percent, Patel believes Amazon's 2003 prospects are bright. His price target of 25 may even prove too conservative: The shares were recently trading above 24. "These guys have put together a pretty compelling strategy," insists the UCLA grad.

COACH

Dana Telsey

Bear, Stearns & Co.

(NYSE: COH) +68.9%

Bear Stearns retail analyst Dana Telsey likes to hang out at local malls and stores whenever she can to "scout out the scene" and see what's hot. In early 2001 her in-person intelligence -- coupled with more objective proprietary retailer surveys -- was telling her that upmarket companies with strong brands had captured shoppers' fancy. Coach, the New York­based maker and retailer of tony handbags and other leather goods, was one name that kept popping up.

The company, founded in 1941, had grown into a $600 million competitor in the $15 billion U.S. market for luggage, handbags and accessories -- and had just gone public in October 2000 at a split-adjusted $8 per share. Telsey, 40, was impressed with its mix of sales through its own branded boutiques and big department stores. More important was management's new strategy: redesigning its own shops, adding new ones, expanding its independent retailer network and extending its product line to include footwear, jewelry, sunglasses and more men's products. In March 2001 Telsey started recommending Coach at a split-adjusted $14.

The stock jumped 43 percent by the end of 2001 and a further 69 percent in 2002, to $33, as the strategy bore fruit. In the fiscal year ended June 2002, Coach's revenue and earnings per share grew 20 and 29 percent, respectively, from 2001. In the quarter ended December 28, 2002, the company posted net sales of $308.5 million and diluted earnings per share of $0.68, up 31 and 39 percent, respectively, year over year.

Even with the shares at $37 in mid-March, Telsey, a repeat Home-Run Hitter who has also been a first-teamer on II's All-America Research Team four times, remains bullish. She projects annual sales and EPS growth of 15 and 20 percent, respectively, over the long term, and thinks the shares can hit $40 over 12 months. "There's definitely still room for growth," she insists, citing new products and variations of favorites. More Coach-owned stores are under development, and plenty of retailers don't yet carry the brand. "The concept is accessible luxury," says Telsey.

Small-cap stocks

Charles Strauzer

CJS Securities

(NYSE: JAH) +204.1%

In late September 2001 new management took charge at Alltrista Corp. (renamed Jarden Corp. in June 2002), the Rye, New York­based maker of Ball- and Kerr-brand home-canning products. The executives, CEO Martin Franklin and CFO Ian Ashken, had their work cut out for them: Alltrista's per-share earnings had tumbled 72 percent in the previous two years, and the stock had slumped 55 percent in the preceding 12 months.

But Charles Strauzer, managing director at CJS Securities, had "no doubts about their ability," he recalls. Strauzer, 35, who joined the White Plains, New York, small-cap specialist when it was created in 1998, knew that Franklin and Ashken had gotten impressive results at another troubled company, Benson Eyecare Corp., and two spin-offs. The management duo also owned 9 percent of Jarden and, having previously tried to buy it outright, arrived with a well-thought-out plan.

Franklin and Ashken almost immediately shed a lagging molded-plastics business and began to emphasize Jarden's consumer brands. Their strategy to boost sales by introducing new products, such as home-canning kits, and acquiring companies with related food-preservation products also held promise, Strauzer thought. He put a strong buy on Jarden in January 2002 at a split-adjusted $8.50.

"No one else had recognized or understood the change going on there," says Strauzer. In 2002 Jarden's net income jumped to $2.52 per fully diluted share from a 2001 net loss of $6.71, thanks partly to the April 2002 purchase of Tilia, maker of the FoodSaver vacuum-sealing device.

By year-end the shares hit $24; they traded at $25 in mid-March. Even if Jarden's consumer line stumbles, Strauzer sees steady revenue from another business unit, which supplies zinc for U.S. and Canadian pennies. "It's a cash cow and a cushion against consumer cyclicality," he says. His target for Jarden: 15 times his 2003 EPS estimate of $2.65, or $39.75, although he adds that he's underestimated earnings every quarter.

©Copyright 2003 Institutional Investor, Inc