Editor’s note: This article was first published in June 2012. Returns run from April 1992 to spring 2012, and the share prices and outlooks are from 2012. Biogen Idec became Biogen in 2015, EMC was bought by Dell in 2016, and Celgene by Bristol-Myers Squibb in 2019.
Over the last 20 years, market volatility has never let up. We’ve gone from huge rallies to bursting bubbles. Some companies have already disappeared, while others trade above 600 dollars a share.
The Wall Street Journal has compiled the 10 best-performing stocks of the last 20 years, specifically from April 1992 to today. While the market where these stocks trade delivered a total return of 382% (S&P 500), putting these 10 stocks in our investment portfolio would have earned us a return of 9,839%. And if we had picked just one of them, Kansas City Southern, our return would have been 19,030%. That means that if we had invested just €1,000 in this company in 1992, we would now have €191,300. These are the stocks:
10. Astronics
Total return since 1992: 6,004%
This company is an aerospace supplier that makes and sells the screens fitted in the backs of aircraft seats, as well as power adapters where passengers can plug in any electronic device. Astronics can benefit both from the manufacture of new aircraft and from the refurbishment of older planes’ cabins.
Its share price rises with the cycle of mass aircraft production, and it could even see a new upswing if it signs new contracts with the military.
9. Celgene Corporation
Total return since 1992: 6,244%
A biotechnology company whose success is mainly due to the drugs it makes to treat a type of blood cancer called multiple myeloma. It is expected to keep rising, as a third blood cancer drug is awaiting approval.
8. Biogen Idec
Total return since 1992: 6,334%
This biotech stock’s growth hasn’t been as steady as Celgene‘s, but its value has doubled since 2010. The company is known for its multiple sclerosis drug Avonex and its more recent treatment, Tysabri. Its future plans include acquiring smaller companies with promising drugs in development.
7. Diodes
Total return since 1992: 8,601%
Twenty years ago, this company only distributed semiconductors. In the late 1990s it became the exclusive US distributor for a manufacturer called Lite-On, and then used the money from that business to move into, and expand, the manufacture of its own semiconductors. Most of Diodes‘ revenue comes from discrete components: small, cheap chips that regulate the flow of power inside an electronic device.
6. Oracle
Total return since 1992: 8,571%
The company’s shares peaked in 2000 at around US$45 a share. Since the dot-com crash they have recovered steadily, though only to around US$30 a share. They haven’t returned to those levels yet, and there are doubts about whether they will ever reach that price again. Anything can happen.
5. Qualcomm
Total return since 1992: 9,232%
This chipmaker also peaked in 2000, at close to US$75 a share, although it has since fallen back to US$62 today. The company developed a technology called CDMA, a key part of wireless networks. Its many patents on that technology let it collect royalties from almost every mobile phone maker. Qualcomm also supplies chips for many mobile phones, including Apple‘s iPhone.
4. EMC Corporation
Total return since 1992: 9,624%
Another tech company that fell hard after the dot-com crash in 2000. EMC Corporation‘s shares were once worth more than three times their current price of US$28. But this data storage company has managed to keep a strong competitive position in a fast-growing industry.
3. II-VI
Total return since 1992: 10,423%
This company mainly sells laser components, and given how much lasers have grown in industry… let’s just say it was one of those companies that seized the moment in a barely tapped market with a big future. No doubt the investors who believed in it from the start are very grateful.
2. Middleby
Total return since 1992: 14,330%
Middleby makes ovens and other equipment for restaurants, but it is probably more of a technology company than an industrial equipment maker. It has also grown through acquisitions and mergers: the stock really took off after its merger with Blodgett, a division of Maytag that also made commercial kitchen equipment. It has bought other smaller companies since then and has recently expanded internationally.
1. Kansas City Southern
Total return since 1992: 19,030%
The stock has risen steadily since the 1990s. Reportedly, it was a slightly… odd company back then: a strange conglomerate made up of a railway and a fund management firm. In 2000 the fund management business was spun off as an independent company, marketing its products and services as Janus Capital Group. At the time of the spin-off, the value was seen to lie in the fund manager, not the railway. However, Janus shares fell 78% after the spin-off, while Kansas City Southern‘s rose 1,051%.
And these are, by far, the 10 best-performing stocks. As the saying goes, “if only I’d known…”. Of course, some of them were considered risky companies and weren’t recommended by analysts, and they were also listed outside the main index. In other words, to use the Spanish stock market as an example, some of these companies weren’t in the IBEX 35 but in the Mercado Continuo (the continuous market), because of their small market capitalisation.
Source: The Wall Street Journal
