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Lessons From 10 Top 10-Year Outperformers

Mar. 11, 2020 11:33 AM ETCTAS, HD, LOW, LULU, MA, MCO, MNST, NFLX, SPGI, SPY, STZ, STZ.B6 Comments


  • In this article, I look at 10 of the best performing stocks over the past 10 years that I knew about 10 years ago, to understand what drove their outperformance.
  • For each stock, I compare their total outperformance versus underlying fundamentals and valuation multiples, to see what factors might help spot next decade's winners.
  • These mini case-studies are mostly meant to show how top performing stocks can still perform even with high starting multiples, no dividend, or other challenges.
  • I do much more than just articles at Long Run Income: Members get access to model portfolios, regular updates, a chat room, and more. Get started today »

The record market decline this past Monday, March 9th 2020 marks almost exactly 11 years since the 2009 market bottom. Although many investors may be stressed by this recent volatility and hope to try and guess when and where the new market might be, I wanted to take a step back and see what would have been some of the best performing names I could have bought after that last bottom. To give some benefit to patience, I am looking back only 10 years, so that even if you waited a year after that 2009 bottom, you still would have caught 10 years of stellar outperformance over the S&P 500, even over one of the S&P 500's best decades. What I wanted to identify was whether factors of growth, financial quality, cheap valuation, dividends, or other metrics were most significant in driving the returns of these top-performing stocks. Only the first of these 10 names is among the obvious "FANG" names that have driven much of the US market's recent rise, and so it should give hope to investors who don't like predicting the future or betting on multiple expansion.

For each stock, I will be presenting four things:

  1. Relative total return of investing $10,000 in that stock 10 years ago versus in the SPDR S&P 500 ETF Trust (SPY)
  2. Growth in underlying fundamentals (sales, profits, cash flows) of the company over the past 10 years.
  3. Valuation multiples over time, and what might be a fair multiple to pay for similar quality companies.
  4. The bottom line lesson I take away from said company's outperformance.

For this list, I have limited my choices to stocks that I did not buy in 2010, but were already large enough companies at the time that I was familiar with their businesses and could have considered

Beyond quarterly earnings and dividends, we look at quality stocks positioned to raise your income through dividends and dividend alternatives over the next quarter century or longer. Get inspired with your free trial to Long Run Income.

This article was written by

Tariq Dennison profile picture

Tariq Dennison, runs an RIA focused on international clients and portfolios, applying his on-the-ground experience as an expat investing in diverse foreign markets. Tariq is the author of the book "Invest Outside the Box" and soon-to-be-released "10 Ways To Invest." He lives in Switzerland, and has worked in Finland, Canada, the UK, Hong Kong, and Singapore.

Tariq is the leader of the investing group The Expat Portfolio where he helps members invest internationally with greater clarity and confidence. Features of the service include: Frequent, short, and focused analysis, access to his watchlist and dashboard, guides to specific foreign markets, and direct access to Tariq and his community in chat for discussion and questions. Learn more.

Analyst’s Disclosure: I am/we are short NFLX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

We are also long NFLX bonds, versus the short position in the stock.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (6)

pool, under the radar steady Eddie
Great article. Definitely gonna keep this one in my "back pocket"
The Abstract Investor profile picture
Great article!
dieuwer profile picture
Great article. If $NFLX ever gets below PS = 3, it will be a strong buy IMHO.
Varan profile picture
You forgot the rarely mentioned TPL. 1793% return since 3/11/2010.
Tariq Dennison profile picture
I didn't know about TPL back in 2010, and it was well below $1bio back then = two reasons I didn't include it this time.
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