A decade ago, the global economy was in recovery and the stage was being set for one of the longest continuous stretches of economic growth in American history. Still, many companies were in a growing phase and gave massive returns to investors to be the best stocks for 10 Years.
Past can never return but it can be a great teacher. The last 10 years have been very, very good for stock market investors. Everyone from the investing community would agree with that. The Russell 1000 large-company index, which tracks the 1,000 biggest U.S. stocks by market value, has gained roughly 252% since the start of the 2010s. Have you thought; what if you would have invested $1000 in the following five best stocks 10 years ago?
TransDigm Group (TDG)
TransDigm Group (TDG) designs, produces and supplies aircraft components. TDG has been one of the best-performing stocks of the last ten years. The company makes what may seem like prosaic items, but makes them to extremely high specifications for aviation. Aside from pumps, it makes motors, controllers, couplings, batteries, and cockpit security systems, among many other components.
If you would have bought TDG stock for $50 at the start of 2010, you would have made over 1100% by the end of 2020. For a $1000 investment, you would have bought 20 shares of TDG stocks 10 years ago. Therefore, by the year-end of 2020, as per the $618.85 closing price of the stock on Dec. 1, you’d have $12,377 in your account.
In Transdigm’s fiscal 2020 ended Sept. 30, the company sold about $5.1 billion worth of those components. When you consider that the company did about $828 million in revenues in fiscal 2010, you start to get an idea of what propelled TransDigm into the ranks of the decade’s top stocks.
Whereas just a year earlier in 2019, TDG had delivered a 77.6% total return, thanks in part to decent organic growth as well as bolt-on gains from the acquisition of manufacturer Esterline. Shareholders also benefited from a $30-per-share special dividend. TDG is among a handful of stocks that have paid several special dividends in recent years.
From here? At 27.6 times forward-looking estimates for next year’s earnings, TransDigm’s stock isn’t cheap, but it’s not in the stratosphere, either.
Exact Sciences (EXAS)
Exact Sciences (EXAS) holds the pivotal in detecting colon cancer via its non-invasive screening test known as Cologuard. The company helps in finding cancer which is one of the leading killers today. Over the last ten years, the company has had amazing growth.
Exact Sciences is among the Russell 1000’s top stocks of the past decade because revenue growth has averaged an astonishing 126% annually over the past few years. In 2010, the company reported only $5 million in total revenues. While in 2020, it reported nearly $1,491 million in total revenues.
Based on a $1000 investment, buying EXAS stock ten years ago at a per-share price of $3.50 would have got you almost 285 shares of the company. On Dec. 1, 2020, as per the closing price of $132.49, you would have $37,759 in your account. That’s nearly a whopping growth of 3,700% which proves that it was one of the best stocks 10 years ago.
Lately, things have not been good enough for the company. Exact has no forward price-to-earnings ratio because of the losses it has been reporting in recent times.
However, things have started to improve. In the recent third-quarter 2021 results, Exact Sciences consolidated revenues were $456.4 million, up 11.8% year over year. The metric exceeded the Zacks Consensus Estimate by 6.4%. While the company narrowed its net loss of 97 cents, significantly lower than a net loss of $1.35 in the year-ago period.
Amazon (AMZN) has proven to be the front face of the digital world with its leading e-commerce website. A $1,000 investment in Amazon would have provided a substantial return for the long-term investor, considering the investment essentially increased in size by over one-third each year for a decade.
The key to Amazon has been the diversification of the company. The competitive advantage it has in providing services is second to none. Amazon consistently adds new products and services for consumer and business customers. Especially, during COVID, its business model was perfectly poised to profit from a pandemic.
AMZN has been on consistent growth and the diversity of Bezos’ firm always adds to the stock price. The company reported $34,204 million in revenues in 2010. After ten years, Amazon posted a whopping figure of $386,064 million in 2020.
AMZN stock has had a compound annual growth rate of 35.19% over the last decade, which is certainly one of the highest in the market.
We really don’t need to dig much deep into AMZN stock to know why it was in the top list of best stocks for 10 years. Back on Jan. 1, 2010, the stock price was around $125 and by the year-end of 2020, it was over $3,200.
Analysts are always bullish on the stock. Cowen has rated the stock to outperform with a price target of $4,500.
Trex Company Inc. (TREX)
Trex Company (TREX) manufactures and distributes wood and plastic composite products, and related accessories primarily for residential decking, and railing applications.
2017 was the best year for Trex stock until 2020 and the company’s shareholders are riding high today. Trex is a profitable company and it has obtained this status with strong growth over the years. In 2010, the company reported $318 million in revenues and after 10 years, Trex closed the year 2020 with $881 million.
TREX is a solid long-term stock with good portability and a track record of improving it made itself in the list of best stocks for 10 years.
For those who are here to evaluate the $1000 investment growth. You guys would have made a $400 annual profit each year with a growth rate of 40%. That’s pretty solid. However, looking forward, currently, the stock is not in the buying zone. But it is a good investment for the long-term considering the right buying point.
Microsoft (MSFT), is a company that changed the dynamics of the technological world. The deity of the ’90s and early 2000’s, Microsoft’s stock has performed quite well over the past few years. However, the magnitude of growth had lowered compared to the 1990s when it helped create a number of Microsoft millionaires.
Still, even these days, MSFT is considered one of the safest stocks you can invest in, especially for first-time investors. Microsoft has been able to replicate a growth rate of over 26% in the past 10 years. That means a $1000 investment would have added around $260 each year in this period.
If we look at the price of MSFT in early 2010, it was traded at around $25 and by the decade-end, it closed at around $221 per share.
Whereas, Microsoft revenues have also been rising. In 2010, the company reported $62,484 million in total revenues and by the year-end 2020, it reported $143,015 million. This journey of the company proves it to be one of the best stocks for 10 Years.
Once considered to be a tech giant, still holds much potential for early investors. Wells Fargo has recently initiated the overweight rating for MSFT with a price target of $400. That’s nearly an upside of 25%.