Revisiting the Top Stock of 1991

Should you ever buy the biggest stock stars of the previous year? Many analysts say no--that you’re too late to the party.

But there’s also something to be said for momentum: Like the Eveready bunny, stocks on the rise often keep going for a long time.

The biggest New York Stock Exchange gainer in 1991, for example, was Chicago-based WMS Industries, which makes pinball games and video lottery terminals and owns casinos in Puerto Rico.

After rocketing 669% in 1991, from $1.81 a share to $13.94, WMS soared 69% in 1992 to $23.625 by year’s end.

WMS’ earnings have surged as its exports of pinball machines worldwide have ballooned since 1990. (A machine based on “The Terminator,” for example, is a big hit--naturally.) WMS is also tapping into the latest gambling craze with its video lottery terminals, which a growing number of states are approving to enhance flagging state lottery revenues.

Charles LaLoggia, who writes the Special Situation Report stock newsletter in Rochester, N.Y., is a raging bear on the market overall, but he loves WMS. The company “stands to be a major beneficiary of the spread of legalized gambling,” LaLoggia says.