LSI shares, which have been trading below $5, could rise more than 50% in a year, driven by new products, better management and improved operating efficiency.

Stryker's stock has fallen 47%, to $40, from its peak. It could rise to the mid-$50s as health-care spending rebounds. Morningstar pegs fair value at $72.

Gun shops and FBI numbers indicate that a post-election rush is subsiding for Smith & Wesson and Sturm, Ruger. Their earnings and stocks could fall back to last year's levels.

Gun shops and FBI numbers indicate that a post-election rush is subsiding for Smith & Wesson and Sturm, Ruger. Their earnings and stocks could fall back to last year's levels.

Citi's Mahaney values Yahoo!'s core business -- not including its Internet investments in Japan and China -- at $15 a share based on a slightly higher enterprise-value/Ebitda ratio. On top of that, Mahaney thinks the Asian investments are worth $6 a share. Adding a premium on the $21 price could move it to the mid-20s in a takeover -- still below Microsoft's initial $31 offer -- but much higher than its current level. So whether Bartz is able to unleash the potential in Yahoo!'s existing business as an independent entity or fixes what she can before selling to Microsoft, investors win. It's just a matter of how much.

Against this backdrop, some consumer stocks are pricing in more pep than the economy can muster. Pool (POOL), for example, is a distributor of swimming-pool supplies and equipment suffering through the worst year on record for new pool construction. Sales could slide by the low double-digits this year from last. Yet shares have rebounded 53% since March 9 to outstrip even home builders -- although any housing-market pickup won't trickle down immediately to pools. Pool is swimming in long-term debt (roughly 61% of capital), and shares fetch 16.5 times projected 2010 profits -- well above the 11.2 times for the inflated leisure-products sector.

Big 5 Sporting Goods (BGFV) shares had quadrupled since late November despite what is essentially a second-tier franchise selling commoditized sporting goods. But the market's embrace of consumer cyclical stocks has lifted Big 5 from 7.7 times forward earnings to 15.5 times in mere months.

AutoNation (AN) shares also have quadrupled recently, to about 17. Sure, auto sales are declining at a slower pace; CarMax (KMX) last week reported first-quarter profits that beat expectations, and industry consolidation should boost margins at the car and parts seller. But AutoNation still has "significant exposure to domestic car makers," Rady says. Shares worth 5.9 times forward earnings late last year have quickly swelled to 16.8 times, overtaking even the rallying broad market.