A strong start for the FORTUNE 40
By David Stires

(FORTUNE Magazine) – Three months is not nearly enough time to judge a portfolio, but this year's FORTUNE 40 is off to a promising start. Our diversified group of domestic and foreign stocks gained 4.9% from June 24 through Sept. 23, topping the S&P 500's 2.5% rise for the same period.

Burlington Resources (BR), the Houston energy giant, is our top performer so far. Most of the company's facilities are in the Rocky Mountains and Canada, so they weren't damaged by the devastating Gulf Coast storms. Meanwhile, soaring oil and gas prices have driven profits to record levels. The stock has jumped 40%.

Lincoln Electric (LECO), a maker of welding and cutting products, is another standout, up 22% on strong sales to energy firms. Demand from Asia and the Middle East has been particularly robust.

Helen of Troy (HELE), which makes personal-care products under the Vidal Sassoon and Revlon brand names, is our laggard. Costs associated with new-product launches and technology investments have been running higher than expected, hurting profits. Its shares are off 17%. -- David Stires