The broad-based S&P 500 index reached its bear market bottom almost a year ago, amid extreme volatility. Since then, investors have sat back and watched the widely followed index rise by 77 percent, a record high. A 77 percent rebound from the coronavirus pandemic lows, on the other hand, would be considered peanuts for certain equities. According to Finviz statistics, 301 large-cap stocks (those with a market value of $10 billion or more) have more than doubled in the past year. Furthermore, 89 have increased by at least thrice, and 29 have increased by more than 400%.
Five large-cap stocks, on the other hand, stand head and shoulders above the rest. If you had the vision and guts to put $100,000 into each of the five companies listed below a year ago (on March 17, 2021), you’d have anywhere from $1.2 million to over $5 million today.
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$1.2 million in plug power
Plug Power, a provider of hydrogen fuel-cell solutions, is the seventh best-performing large-cap over the last 12 months (NASDAQ:PLUG). In mid-March, a $100,000 investment in Plug would be worth nearly $1.2 million today.
The Biden administration is one of the largest windmills in Plug’s sails. Following President Joe Biden’s victory in November, Democrats gained a small majority in the Senate, putting Democrats in a position to approve clean-energy legislation. Plug’s fuel-cell technologies could be one of the answers offered by the present administration, which is focused on renewable and clean energy sources.
In January, Plug Power benefited from the announcement of two large joint ventures. First, the SK Group of South Korea purchased a 10% share in the company. In South Korea, Plug and SK Group will collaborate to provide fuel cell technology to vehicles and filling stations. Plug Power and Renault, a French carmaker, formed a joint venture a week later to focus on fuel-cell solutions for Europe’s light commercial vehicle market.
Although Plug Power’s sales estimates have risen significantly in recent months, it’s likely that the company’s underlying technology, or the fuel-cell sector in general, will require more time to mature.
In 2020, the NIO EC6 crossover was released. NIO is the source of this image.
$1.54 million in NIO
Have I mentioned how popular alternative energy sources are? Tesla, despite its 716 percent trailing-year gain, came in second in the return column to China-based NIO (NYSE:NIO). NIO’s 1,443 percent return has more than doubled Tesla in the last year, turning a $100,000 investment into $1.54 million.
The answer to the question “Why NIO?” has to do with the car industry’s future as well as the market in which it operates. China is predicted to be the world’s largest electric vehicle (EV) user. According to the Society of Automotive Engineers of China, by 2035, almost half of all vehicles sold will be powered by alternative energy (95 percent of which will be electric vehicles). With the introduction of the EC6 crossover and the announcement of a new premium sedan, the ET7, NIO more than doubled its full-year deliveries last year.
With its battery-as-a-service offering, NIO has also piqued interest. This scheme enlists purchasers in a monthly fee-based program in exchange for a discount on the purchase price of a new electric vehicle. NIO has chosen to forego immediate profit in order to retain loyal consumers and generate high-margin fee revenue in the long run.
Nonetheless, a $70 billion market cap for a company that has only delivered 88,444 automobiles since its beginning may be overly optimistic.
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$1.7 million, according to Penn National Gaming.
Penn National Casino (NASDAQ:PENN), a gaming and sports betting company, is likewise doing well for investors. Penn National, like a racehorse galloping around the track, has returned just about 1,600 percent in the last year. This would have transformed $100,000 into $1.7 million, which isn’t bad.
The launch of the Penn National Gaming rocket is dependent on two elements. For starters, the company’s typical gaming operations aren’t based in niche regions or destinations that are solely focused on travel. This means that the casino properties Penn manages are friendly to both locals and out-of-state visitors. Penn wasn’t nearly as badly hit by the coronavirus that brought Las Vegas to a halt, because its casino properties are spread across 20 states.
Penn National’s stock participation in Barstool Sports is another clear aspect. Sports betting on the internet is exploding right before our eyes. Over the course of a year, we’ve seen more than a dozen states legalize sports betting, with a handful of more on the verge of doing so. Morgan Stanley estimates that nationwide legalization of sports betting may generate $15 billion in yearly revenue by the middle of the decade. That bodes well for Penn’s collaboration with Barstool.
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$2.37 million for Novavax
Perhaps it’s no surprise that a biotech stock developing a coronavirus disease 2019 (COVID-19) vaccine is one of the best-performing large-caps over the past year. Novavax (NASDAQ:NVAX) stock has soared about 2,300 percent, turning a $100,000 investment into a stunning $2.37 million.
Novavax has announced final efficacy data from their NVX-CoV2373 late-stage research in the United Kingdom. The vaccination was 96.4 percent effective against the COVID-19 virus’s original strain and 86.3 percent effective against a variation that has been circulating in the United Kingdom. In a phase 2b research in South Africa, where a different version has been circulating, Novavax’s vaccine candidate was less successful (55.4 percent efficacy in HIV-negative subjects).
It’s no secret that vaccinating more than 7 billion people around the world will be difficult. Given the likelihood that COVID-19 will not be phased out anytime soon, Novavax has a strong chance to develop NVX-CoV2373 into a recurring revenue stream. It would be especially beneficial if the company’s vaccine candidate was approved by the US Food and Drug Administration before the end of May.
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$4.96 million for GameStop
GameStop (NYSE:GME), the video game and accessory store, is the king of the castle among large-cap companies, as if there was any doubt. GameStop would have turned a $100,000 investment into nearly $5 million with a gain of about 4,900 percent over the previous 12 months.
While it would be good to imagine that the company’s 309% e-commerce growth over the 2020 holiday season is fueling this share price increase, the reality is that retail investors on Reddit are to blame.
GameStop was the most shorted stock in January, based on its float. This made it an ideal target for short-term and young investors. To achieve a short squeeze in GameStop, Reddit investors effectively grouped together and bought stock and out-of-the-money options. Short sellers (mainly institutional investors and hedge funds) all flee the market at the same time during a short squeeze. Short-sellers must buy to cover their holdings in order to withdraw their positions, exacerbating the stock’s rising trend.
GameStop is without a doubt the most successful and dangerous large-cap on our list. GameStop waited much too long to transition its focus to digital gaming, and as a result, the retailer is certain to lose money for the fourth year in a row in 2021. Despite recent gains, it should not be included in investors’ portfolios.
This post is the author’s own view, which may differ from a Motley Fool premium advice service’s “official” recommendation position. We’re a mishmash! Questioning an investing theory, even our own, encourages us to think critically about investing and make decisions that will make us smarter, happier, and wealthier.
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