4 Comeback Kid Stocks for 2012

The trading year is over, and for so many companies, closing the books on 2011
couldn't come fast enough. The volatile year caused a lot of former market
stalwarts to tumble during the past 12 months, but now the question is which
battered market stars will be able to mount a comeback. For this assignment, I
polished my crystal ball and tried to foresee which stocks have the potential to
shed their bearish robes and jump back on the bull in the year to come. Here are
four comeback kid stocks for 2012: First Solar The solar sector suffered
third-degree burns in 2011, with industry leader First Solar (NASDAQ: FSLR )
sinking almost 75%. The stock's decline really heated up in December when the
company lowered its 2012 outlook . So why should we think First Solar's shares
could be one of the comeback kid stocks in 2012? Well, because demand for solar
panels remains high. In Q3 we saw record-setting U.S. solar installations, with
449 megawatts of PV installed in the U.S. alone. Installations in Q4 are
predicted to be even bigger, and industry analysts think there will be a
substantive acceleration in solar PV installations in the U.S. over the next
five years due to a classic combination of decreased solar installation costs
and increased solar demand. There will be growth in the solar sector in the
months and years to come, and once the market recognizes this growth, the sun
could rise again on First Solar shares. Goldman Sachs It was a tough year for
the financial sector in 2011. Some of the biggest names in the business got
taken to the woodshed by investors, including Bank of America (NYSE: BAC ) ,
Citigroup (NYSE: C ) and Morgan Stanley (NYSE: MS ) . Even the most savvy, most
politically connected financial firm, Goldman Sachs (NYSE: GS ), had a terrible
time of it in 2011. Goldman shares are down 46% for the year, but in 2012
Goldman is likely to flip that script. For Goldman, 2012 is going to be a
transition year, as the firm deals with a new set of proposed financial rules
governing bank holding companies. Once the rules are set, the smart people at
Goldman can get back to the business of making money. If they succeed, look for
GS shares to surge in 2012. China 25 Index Chinese stocks were rocked in 2011 by
growing fears that the country's economy represented an unsustainable bubble
waiting to burst. Then there were the many Chinese companies that tanked due to
bogus financial data, and even criminal malfeasance. The negative perception,
when it comes to investing in the country's market, caused the iShares FTSE
China 25 Index (NYSE: FXI ) the benchmark measure of quality Chinese stocks to
sink 19% this year. This trend definitely could reverse course in 2012, as China
moves to loosen its purse strings and make more capital available. In 2011,
Chinese policymakers forced banks to increase loan reserve requirements to
control inflation. That move worked, and now China is back to adopting
friendlier lending standards. In fact, we will likely see an interest-rate cut
in China in the first quarter, and that almost certainly would spark some major
buying in FXI. Potash This fertilizer stock stunk up Wall Street in 2011, as
industry leader Potash (NYSE: POT ) fell almost 20%. The company struggled to
keep up with competitors such as CVR Partners (NYSE: UAN ), but many analysts
now think Potash is poised for a recovery. Potash has nearly completed spending
on its huge Brownfield expansion program, and that will put it into position to
start taking better advantage of high potash prices, and what will likely be a
record year in terms of global demand. The company is expected to see EPS growth
of about 19% in 2012, and given its current price, POT shares really could begin
to smell like roses and be one of the best comeback kid stocks of 2012. This
article originally appeared on Traders Reserve .