- The top three gainers were brick and mortar retailers.
- High-tech companies had very limited representation.
- None had highly leveraged balanced sheets.
- Many had the top brand in their industry.
In order to manage an equity portfolio better investors need to look at which companies had the best stock price performance over a long period of time. Often there certain characteristics these high performing companies have could be useful in picking stocks that will achieve outstanding returns.. Using Bloomberg Terminal “MOV” for percent increase on the S&P 500 Index as far back as data is available on these terminals. I created a list of the 20 stocks with best percent price increase from February 2, 1990 to September 6, 2019. These figures are not total return numbers because dividends were not factoring into the data.
The list includes those companies that were members of the S&P 500 Index on February 2, 1990, which means that they were already large established companies, but it does not necessarily mean they were still in the S&P 500 Index today. C.R. Bard is on this list even though it was acquired by Becton Dickinson in 2017. In addition, companies added to the S&P 500 Index after the start date may actually have a larger percent price increase than members on this list.
S&P 500 Index Largest Stock Price Increases 2/2/1990-9/6/2019
|Latest Company Name||% Increase|
|Becton, Dickinson and Co.||(BDX)||5,647|
|S&P 500 Index||781|
Source: Bloomberg Terminal (Using "MOV" on S&P 500 Index)
Industries on the List
Investors may be surprised to see that the top gainers are brick and mortar retailers, since many consider brick and mortar as a dying industry. One-quarter of the 20 member list contains brick and mortar retailers. These extremely successful niche market retailers actually were part of the reason other retailers have been closing. They drove out their competition. Only one of the retailers, however, sells apparel.
Another industry that has multiple members on the list is the defense industry. I would expect the continued wars in the Middle East has been an important factor for their growth. The movement away from manpower/troops to high-tech in fighting also played a major roll.
Many companies on the list are the only one from their particular industry. That seems to indicate that certain companies can achieve excellent returns for investors even while the industry as a whole does not.
It is interesting to see which industries are not on the list. For example, there is no bank on the list and high-tech has very limited representation. Those tech companies that were created after the development of the internet would not be on the list because the list starts in 1990 before the internet was widely available. There were, however, many other tech companies that were in the S&P 500 Index in 1990, but they have not been the top gainers for investors. (Off the top of my head-perhaps high-tech companies already have their best stock price gains before they get included in the index.)
There are a number of characteristics that almost all the members have in common:
*Top brand names
*Low financial leverage
Avoiding too much leverage seems to be a very important factor here. If investors want higher leverage to increase their return on invested capital, they should consider doing it themselves by buying on margin and not by buying companies with highly leveraged balance sheets.
The good news for investors is that these common characteristics can be found by in-depth company research, but the bad news is that there are many companies that are not on this list that also have all these characteristics. Investors, therefore, will have to do extensive research when picking potential top performers.
When I ran this report request on Bloomberg I was hoping to find some general characteristics to use when screening stocks and I was also hoping to find the one absolute key factor that is the “silver bullet” to use in trying to pick a stock when “seeking alpha”. I was disappointed-there isn’t one. Most of these companies on the list are quality companies that have been able to grow and adopt over the years. To pick future high stock price gainers will take a lot of research.
Analyst's Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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.
I have had positions in most of the companies on the list. At the time I wrote this, I have no current positions.
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