While some of the anticipated good news has materialized, further upside remains possible. A nearly 40% rise in operating income was driven by improving refining margins that should stay robust through the summer. Gasoline demand, for instance, shows few signs of abating, despite rising pump prices. Meanwhile, stricter product specifications, more complicated refining processes and tighter labor all help limit supply, and "refining margins could stay higher for longer than most on Wall Street expect," says Friedman Billings Ramsey analyst Eitan Bernstein.

Thanks to a number of key contract wins, solid quarterly results and investors' thirst for water stocks, Tetra Tech (ticker: TTEK) shares hit a 52-week high of 21.78 last Tuesday, a 40% run since our July profile ("Making a Splash," July 31, 2006). At these loftier levels, the price-to-earnings ratio of 33 times trailing earnings heightens the execution risk for the Pasadena, Calif.-based engineering and consulting outfit that gets 85% of its revenue from water-related projects. Even so, the stock has the potential to scale its recent high-water mark. A growing backlog, continued steady flow of new contracts and acquisitions promise to boost profits above expectations and drive the stock into the mid-20s over the next year.

Currently, only the International Securities Exchange (ticker: ISE) is listed. For all but the most aggressive investors, or anyone not lucky enough to get shares in CBOE's IPO, the best way to invest in exchanges may be the CBOE's thinly traded Exchange Index (EXQ). The index is comprised of the seven listed exchanges -- the CBOT BOT), Chicago Mercantile Exchange (CME), Intercontinental Exchange (ICE), ISE, Nasdaq (NDAQ), Nymex (NMX), and NYSE (NYX) -- which should disperse market-structure and transaction-fee risk across stock, futures, and options exchanges.

A dividend increase better aligns management's interest with shareholders'. The market knows that EPS increases are declining, but perhaps it doesn't get that "the total amount of earnings available for shareholders is decreasing," he says. This favors higher-quality large-cap stocks, McCormick maintains, the kind of equity that's been out of favor for years. If the market is going to give you just 5% growth, "why not go for Procter & Gamble [ticker: PG]," he says of one of his favorite positions. Much of P&G's 14% EPS rise is coming from faster-growing international sources, he notes.

When an industry in the dumps takes a turn for the better, the stocks of its most downtrodden members can benefit the most. Such is the case for cellphone wholesaler Brightpoint, whose shares (ticker:CELL) shot up 7% last Monday on an analyst's upgrade. Brightpoint shares, now about 14, could rise another 50% if the company fulfills its plans to grow faster than the overall wireless market.

M&F Worldwide shares just hit an all-time high and are up over 350% in the past 12 months, but one well-known investor apparently sees plenty of room for the stock to run.Following the stock's surge, "people get scared wondering if they've missed the boat here, but Perelman is sending a message that there's still room on the boat," Silverman says, calling the buy a "great long-term signal."

The bull case really begins with the brokerage business. The unit is expected to generate $226 million of net profit for the fiscal year ending March 31, or 15% of the total. For the time being analysts at Citigroup, HSBC, Dresdner Kleinwort and Credit Suisse have concluded the unit is worth between 18 and 22 times earnings. That means a valuation of roughly $5 billion. That is conservative, as it doesn't take into account the continued integration of Refco, the commodities brokerage Man bought in 2005. The deal, with a total price of $323 million, has been dilutive to earnings because of integration costs. It should start adding to profits in 2008.