Making the Grade
The Best Stocks From the Last 10 Years
We’re approaching the end of the year.
It’s a time for all of us to look back and reflect.
And as we cross into a new decade – waving goodbye to the 2010s – we’re also stepping into history.
We’re witnessing an event rarer than the appearance of Halley’s Comet. Rarer than watching Venus’ transit across the surface of the sun.
In fact, it’s something that hasn’t happened in 170 years.
For the first time since before the Civil War, the U.S. hasn’t fallen into a recession during a 10-year period.
That may not seem momentous. But like clockwork, in every decade for the past 170 years, the American economy has cratered into a recession… But not this time.
Now, our last recession was admittedly a doozy. It scarred generations of Americans.
The 18-month stretch from December 2007 to June 2009 saw historic foreclosure rates and skyrocketing U.S. unemployment. More than a decade’s worth of gains were wiped out in a matter of months.
The damage was so severe and widespread that many economists believed we had only one direction left to go: up.
And up we went…
The more than decade-old bull market transformed the broader indexes into big-time winners.
In fact, $10,000 invested into the SPDR S&P 500 ETF Trust (NYSE: SPY) on March 9, 2009, would be worth more than $47,000 today. And that’s not including dividends.
Of course, individual stocks offered returns several times that amount. And that’s what we’re going to reflect on today…
The All-Decade Team
For today’s Making the Grade, I want to look back at the best-performing stocks of the last 10 years.
Many of them are household names. They’re icons of the changing economic and consumer landscape of the past decade.
But some of these companies have been under-the-radar outperformers. They’ve posted life-changing returns without mainstream name recognition.
Here they are…
There’s probably little surprise that the video streaming giant Netflix (Nasdaq: NFLX) is the all-star of our all-decade team.
Shares were trading for less than $10 in December 2009.
E-commerce giant Amazon (Nasdaq: AMZN) also gets a head nod for being on the list. The only eyebrow-raiser here might be that it didn’t rank higher.
But what was interesting when looking back at the best performers of the past 10 years was finding that the list wasn’t dominated by Silicon Valley darlings. Some stocks on the list are biotechs.
Heart pump maker Abiomed (Nasdaq: ABMD) and Invisalign manufacturer Align Technology (Nasdaq: ALGN) scored big for investors. And in an era of Instagram models and YouTube celebrities, makeup retailer Ulta Beauty (Nasdaq: ULTA) shares scored a 10-bagger.
Though, I want to draw attention to those names not on every investors’ lips.
Many people unfairly find bonds boring. They’re more than just the faves of income seekers. And shares of bond trading platform MarketAxess Holdings (Nasdaq: MKTX) have been far from needing to stifle a yawn.
The company controls 80% of all electronic trades of investment-grade corporate bonds. It’s the biggest fish in the pond. It also participates in high-yield, emerging market and European bond trading. And it’s on track to report its 11th consecutive year of record revenue.
It’s one way investors have earned quadruple-digit returns on bonds during the past decade.
Then there’s the “plain Jane,” TransDigm Group (NYSE: TDG).
The Ohio-based company manufactures a wide array of aircraft components. That’s not as fascinating as electric vehicles or $500 flamethrowers, but slow and steady wins the race.
And TransDigm’s massive 2,000% return over the past decade is thanks in part to enormous dividend payouts of $30, $22, $24, $25, $22 and $12.85 during that stretch.
Finally, in an era of renting rather than owning, United Rentals (NYSE: URI) has thrived.
The company has more than 1,170 locations across North America. For construction and industrial businesses, it rents everything from earthmovers to power tools to drones. And that’s been the key to United Rentals’ success.
The Best Trend to Break
It’s been little more than a decade since the end of the financial crisis.
The economy has chugged higher. And today, unemployment is at its lowest level in half a century as our “recession-a-decade” trend has been broken.
The markets have soared to new all-time highs. And those harebrained projections that called for the Dow Jones Industrial Average to hit 30,000 don’t seem so wild now.
But regardless of how much the bull market still has left to run, looking back at the top 10 stocks of the past decade proves one thing: A solid, boring, no-nonsense business will always offer impressive returns over the long haul.
Here’s to high returns,
Holiday Spending Is About to Begin
October 6, 2020
4 ETFs to Play the Fourth Industrial Revolution
May 19, 2020