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Which Stocks Outperform The Highest - And Why (#1)

  • Subgroups of stocks can be identified that have exceptionally outperformed comparative indices across multiple exchanges and time periods.
  • These subgroups of exceptional stock market performers have been researched over YTD, 1 Yr, 2 Yr, 10 Yr and 25 Yr time periods for the NYSE and NASDAQ exchanges.
  • There are a number of trends and underlying factors that are consistent across all these time periods for these exceptional outperformers.

In all markets there are always a number of stocks that outperform the market. For some of these stocks their increases in price are not just slightly above relevant market indices. For a small proportion of identified stocks, they outperform any benchmark Indices to such a large extent that they well and truly stand out from the rest of the market.

Our name for this subgrouping of stocks is exceptional stock market performers-because their outperformance, relative to the rest of the market, is genuinely exceptional in a number of respects.

At Exceptional Stock Performers, we have undertaken research and analysis on numerous stocks over time periods of YTD (2015), 1 year, 2 years, 10 years and 25 years and across multiple global exchangesthat have all exceptionally outperformed market indices.

The data and analysis presented in this series of posts are an extraction of the larger data sets and illustrate a combination of trends and the main common factors that underlie exceptional stock market performers.

This first post in the series will look at exceptional outperformers for the NYSE and NASADQ exchanges over YTD, 1 and 2 year time periods.

Subsequent posts will look at exceptional stock market performers for the NYSE and NASADQ exchanges over 10 and 25 year time periods, as well as exceptional outperformers across other global exchanges.

The full data sets from which these extracted tables are taken, and the accompanying more comprehensive analyses, are available at Exceptional Stock Performers.

YTD data

The table below lists the top 10, out of 30, stocks that have been identified as the highest outperformers for YTD price gains (till the end of Sept).

Ticker

Company Name

Sector

Sep30

Price

YTD Gain

CBIO

Catalyst Biosciences Inc

Biotechnology

4.66

1140%

VLTC

Voltari Corp

Telecommunication

7.10

975%

NYMX

Nymox Pharmaceutical

Pharma/Biotech

3.44

760%

EGRX

Eagle Pharmaceuticals

Pharma/Biotech

74.03

377%

REPH

Recro Pharma Inc

Pharma/Biotech

12.03

320%

EXEL

Exelixis Inc

Biotech/Pharma

5.61

289%

ANTH

Anthera Pharmaceutical

Biotech/Pharma

6.09

285%

ANAC

Anacor Pharmaceuticals

Biotech/Pharma

117.71

264%

DSKX

DS Healthcare Group

Consumer Goods

2.44

229%

ENVI

Envivio Inc

Telecommunication

4.09

205%

 

Average

   

484%

 

Comparative Indices

     
 

S&P 500

   

-6.7%

 

NASDAQ Composite

   

-2.3%

 

NASDAQ-100 Technology

   

-9.7%

 

DJ US Pharma & Biotech

   

-5.9%

 

DJ US Health Care

   

-3.3%

(Sources: Exceptional Stock Performers, Barchart, Yahoo Finance)

A broad initial analysis reveals a number of obvious aspects about these YTD data:

  • While the YTD performance of the S&P 500 and NASDAQ Composite (up to 30 Sept) were a disappointing -6.7% and -2.3% respectively-the average gain for the top 30 strongest outperforming stocks across both the NYSE and NASDAQ exchanges was a huge 484%.
  • Given that these YTD gains were recorded before markets rallied in October-these average gains for the top 10 outperformers are indeed quite exceptional.
  • Noticeably, for these Top 10 exceptional stock market performers, 8 out of the 10 stocks were Biotech / Pharmaceuticals, while the other 2 were (other) Technology-related.
  • These market sectors for the top 10 stocks are quite similar to the market sectors that are evident for other exceptionally outperforming stocks. For example, analysis of data for the Top 30 YTD price gainers reveals that 76% of those stocks were either Biotech / Pharmaceuticals, other Healthcare, or other Technology and technology-related.

This concentration of outperforming stocks in particular market sectors is also found in similar YTD data that have been researched by Exceptional Stock Performers across exchanges in the UK, Canada, Australia and India.

1 and 2 year data

The table below lists the top 10, out of 30, stocks that have been identified as the highest outperformers for the latest one and two year periods (up to December 31 2014).

Ticker

Company Name

Sector

1 Yr Gain

2 Yr Gain

CAGR*

Sortino Ratio

GRBK

Green Brick Par.

Property Dev

617%

146%

57%

19.80

AVNR

Avanir Pharmac.

Pharma/Healthcare

428%

487%

142%

23.96

RDNT

Radnet Inc.

Healthcare/Imaging

427%

240%

84%

17.17

VRS

Verso Paper

Consumables(Paper)

427%

230%

82%

16.90

RDUS

Radius Health

Biotech / Pharma

385%

N/A

128%

20.95

OVAS

Ovascience Inc.

Biotech / Healthcare

385%

420%

N/A

N/A

AGIO

Agios Pharmaceut

Biotech / Pharma

366%

N/A

N/A

N/A

BLUE

Bluebird Bio Inc.

Biotech / Healthcare

339%

N/A

N/A

N/A

RCPT

Receptos Inc.

Biotech / Pharma

305%

N/A

N/A

N/A

TGTX

TG Therapeutics

Biotech / Pharma

286%

328%

107%

15.72

 

Average

397%

309%

100%

 
 

Comparative Indices

       
 

S&P 500

12%

41%

   
 

NASDAQ Composite

13%

57%

   
 

NASDAQ-100 Technology

25%

64%

   
 

DJ US Pharma & Biotech

24%

71%

   
 

DJ US Health Care

25%

69%

   

* CAGR: Compound Annual Growth Rate

(Sources: Exceptional Stock Performers, Barchart, Yahoo Finance)

Without going into the more detailed analysis of these data, which is available at Exceptional Stock Performers, some very obvious trends and patterns are initially apparent from a broad analysis of these extracted one and two year data and include:

2014 (one-year) performance

  • The average 1-year price increase across the extracted top 10 stocks was 309%, which was more than 30X both the S&P 500 and NASDAQ Composite increase over the same period.
  • The application of technology, notably the application of technology to medicine, accounted for 80% of these top 10 stocks. The concentration of the top 10 outperformers from this sector is higher than the 46% of the top 30 exceptional outperformers that are represented by this sector.

2014 and 2013 (two-year performance)

  • The average 2-year price increase across the extracted top 10 stocks was 397%, which was more than 7X the S&P 500 and more than 5X the very strong NASDAQ composite increase over the 2-year period.
  • Even though the application of technology, was much lower for these extracted 2 year stocks, the application of technology, in various contexts, nevertheless accounted for 80% of the top 30 stocks that had triple digit growth across the two year period of 2013 and 2014.

Trends and themes across all three time periods

As evident from the broad analyses outlined above (and as also expanded upon further at Exceptional Stock Performers), a number of trends are apparent across these YTD, 1 year, and 2 year data sets. The main trend and theme is:

The influence of technology is clearly dominant for the vast majority of these exceptionally outperforming stocks-across each of these three time periods.

In particular, it has been technology applied to medicine and healthcare [e.g. biotechnology / pharmaceutical and other healthcare-related technology stocks such as Radnet (NASDAQ:RDNT), Radius Health (NASDAQ:RDUS), Ovascience (NASDAQ:OVAS), Eagle Pharmaceuticals (NASDAQ:EGRX), Anacor Pharmaceuticals (NASDAQ:ANAC)

Other time periods and other underlying characteristics

Subsequent posts will examine the data for the highest outperforming stocks over the last 10 years and 25 years for US exchanges.

A number of trends and additional fundamental characteristics will then be identified for these exceptional stock market performers.

Further examination of the underlying fundamentals, combined with the associated trends and analyses, will then provide some insights into the likelihood of substantial future price gains for a particular subgroup of targeted stocks.

Disclaimer: No guarantees or representations are made or intended from the information and analysis presented in this article. Exceptional Stock Performers is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor before making any investment decisions.