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Tuesday, Jan. 29, 2013, 12:01 a.m.

Some of the stocks that led the stock market's rally the past two weeks probably will be among the market's leaders in the future.

At least, that's what a little study I did over the weekend suggests.

The current rally featured eight straight up days, ending Friday.

The last time the stock market saw a streak like that was in 2004, when the market rose nine days in a row in the fall.

This weekend, I studied the fate of the 10 stocks within the Standard & Poor's 500 Index that led that 2004 rally. Most of them have gone on to continued gains — often huge gains.

Intuitive Surgical Inc. (ISRG), which was the third-hottest stock in the 2004 rally (up 29 percent in nine days) has gained an additional 1,774 percent from Nov. 4, 2004, through Jan. 25, 2013.

F5 Networks Inc. (FFIV), which was up 29 percent in the 2004 rally, has added 396 percent since.

The leader in the 2004 streak was Nvidia Corp. (NVDA), up 32 percent in nine days. Since then, it has tacked on an additional 112 percent.

As a group, the 10 stocks that led the rally eight years ago have advanced 269 percent since then, compared with 53 percent for the S&P 500 Index, which is a decent proxy for the stock market as a whole.

Of course, not every leader in the fall of 2004 has gone on to greater heights. Two of the 10 best stocks in that rally are down since then. Zimmer Holdings Inc. (ZMH) has declined 7 percent, and Harman International Industries Inc. (HAR) has fallen 59 percent.

Cardinal Health Inc. (CAH) has advanced 48 percent, but failed to beat the S&P 500. Express Scripts Holding Co. managed only a 1.5 percent return.

Eight-year returns for the three other stocks that led the 2004 rally were 242 percent for Humana Inc. (HUM), which I own personally and for clients; 102 percent for Aetna Inc. (AET); and 85 percent for PerkinElmer Inc. (PKI).

These are mixed results, but are enough to suggest that it's worth taking a look at the leadership in the market's latest streak.

In the latest rally, the 10 best gainers within the S&P 500 are: Netflix Inc. (NFLX), up 64 percent; Genworth Financial Inc. (GNW), up 18 percent; Life Technologies Corp. (LIFE), up 18 percent; KLA-Tencor Corp. (KLAC), up 15 percent; H&R Block Inc. (HRB), up 15 percent; Nabors Industries Ltd. (NBR), up 15 percent; Chesapeake Energy Corp. (CHK), up 14 percent; PulteGroup Inc. (PHM), up 13 percent; Morgan Stanley (MS), up 13 percent; and Intuitive Surgical (ISRG) up 13 percent.

The gains cover the period from the Jan. 14 close through Friday.

Look who's in the No. 10 spot: It's none other than Intuitive Surgical, a leader in the 2004 rally and a leader in the 2013 one as well. The Sunnyvale, Calif., company makes surgical instruments such as endoscopes, retractors and ultrasonic cutters.

Because I'm a value investor who seeks out undervalued situations, Intuitive Surgical is not for me. The stock sells for 36 times earnings, 6 times book value and 10 times revenue. I look for stocks at less than 15 times earnings, less than two times book value, and/or less than two times sales.

The biggest winner lately has been Netflix, which posted a 13-cent-a-share gain for the fourth quarter when analysts had expected a 13-cent-a-share loss. Selling at more than 500 times earnings, Netflix isn't my cup of tea either. But there are a few stocks among the rally leaders that I like.

I see potential gains in Genworth Financial Inc. The Richmond, Va., company offers life insurance, mortgage insurance and long-term-care insurance. Its stock sells for less than book value.

Nabors Industries Ltd., an oil and gas drilling company based in Bermuda, is also selling below book. It looks attractive to me, although most analysts rate it only a “hold.”

I think KLA-Tencor is a good purchase for long-term investors, though I wouldn't expect much action in the next six to 12 months. The Milpitas, Calif., company makes process-monitoring equipment for semiconductor manufacturers. It has been consistently profitable except in fiscal 2009, the heart of the Great Recession.

More timely but more speculative is PulteGroup Inc. of Bloomfield Hills, Mich., a homebuilder. Pulte's valuations fail my normal tests, but I believe that homebuilders are in the early stages of a long and strong comeback.

John Dorfman is chairman of Thunderstorm Capital in Boston and a syndicated columnist. He can be reached at

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