As the first quarter ended, analysts marveled at the best performing stocks in the S&P 500 — Best Buy Co. Inc. (NYSE: BBY), Netflix Inc. (NASDAQ: NFLX) and Hewlett-Packard Co. (NYSE: HPQ). In each case, the improvement has a foundation in how much the shares dropped over two years while the overall economy picked up, more than any real recovery of the business prospects of each.

Wall St. sometimes gives public companies the benefit of the doubt when they try to improve their troubled businesses. That only works for so long, as the prices of stocks like Nokia Corp. (NYSE: NOK) and Blackberry (NASDAQ: BBRY) have shown. One slight stumble, or one quarter that is short of expectations, sends share spinning down again.

Best Buy shares rose 80% in the first quarter, but they are down 25% over the past two years. No one has adopted the position that the company can recover from the beating it has taken from Amazon.com Inc. (NASDAQ: AMZN), which means that the greatest hope for the electronics retailer is that it can cut costs as it tries, without success, to gain a prime position on the Internet. The hope of a recovery is based on closing stores.

The argument for Netflix is that its subscriber base has started to grow again. Early indications are that its foray into original programming might work as a way to gain market share from other online movie rental operations, particularly those from Amazon and Apple Inc. (NASDAQ: AAPL). But the positive case for Netflix is undermined by the costs of content it licenses from large content producers. They know that Netflix cannot do well without them, and they have begun to price their products accordingly — higher with each new round of negotiations. Shares in Netflix are down 20% over the past two years.

The least likely candidate for a price recovery was Hewlett-Packard, the shares of which moved up almost 60% this year but are down 40% over the past two years. Its board was almost voted out of office by shareholders recently. The debacle over the accounting mess caused by its buyout of Autonomy has just started. Investors have to hope that HP is worth more than the sum of its parts and that CEO Meg Whitman will take advantage of that by selling some operations, like its PC business. Or, HP can continue its habit of cutting thousands of jobs each year, a temporary means to help earnings.

Not a single one of these three companies has any chance for a permanent recovery.

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