As a UK investor, reading about the astonishing gains made by US tech stocks can be tough. According to data from IG.com, a £1,000 investment in Netflix made in 2009 would have grown to £41,308 by 2019. A similar investment in Amazon would have been worth £19,320.
Holding Netflix and Amazon over those 10 years would have returned 4,031% and 1,832% respectively. Could a UK investor have owned these stocks in an ISA or SIPP? As long as the provider made these stocks available and additional paperwork was completed, then yes, they could have.
Dealing in international stocks does add extra layers of complication, including the effect of exchange rates on the sterling value of the investment. For those unwilling or unable to bear the complexities, does that mean missing out on the opportunity of US tech stock style returns?
No, it does not. Using data from AJ Bell, I found multiple UK stocks that made enormous 10-year gains. I have already written about three AIM 100 stocks that delivered +3,000%. One of them beat Netflix, and the other two got close.
However, there are stocks in the FTSE 250 and even the FTSE 100, that raked up eye-watering gains over the last 10 years. They didn’t do as well as Netflix, but they did outperform Amazon.
The first is Ashtead Group, a company that rents out construction and industrial equipment. A £1,000 investment in Ashtead made 10 years ago would be worth around £29,383 now, returning 2,938% in total, or 40.22% on average each year.
4imprint Group, a service, product, and event promotor, delivered a 2,886% return over a decade. A £1,000 investment grew by 39.97% on average for each of the last 10 years to £28,864.
And finally, a 2,577% 10-year return was possible with shares in JD Sports Fashion. A £1,000 investment in this brick-and-mortar and online retailer would have grown by 38.39% on average each year to end up being worth £25,766.
Ashtead and JD trade are FTSE 100 constituents, and 4imprint is as member of the FTSE 250 index.
It’s easy to look at multiple thousands of percentage points of return and ruminate on a missed opportunity. While I grant you Ashtead and 4imprint may not be household names, they trade on the FTSE 100 and 250 respectively. JD is well-known and a FTSE 100 member.
However, many investors would have missed out on the full 10 year gain for all three. Please don’t fall into the trap of thinking the fortunes of these stocks were easily predictable 10 years ago, given the results we see today.
Nevertheless, each of these stocks appreciated by 1,000% at some point over the last decade. Some investors may have seen this but concluded that the ride was over. They would have missed out on the next 1,000% and then some.
Instead of assuming a high-flying stock has had its best days already, do some research. What kind of market share does the company have? Can new markets be entered, or new products released? Can revenue and earnings growth continue to impress?
Going all-in on one stock is foolish. After all, if it goes to zero an investor loses everything. Holding multiple stocks or entire indexes, both domestic and international, will diversify the risk in your portfolio. But if you have the capital to risk on an already hot stock, and if prospects still look exceptional, then you might catch the next 1,000%.
The post Move over Amazon! A £1,000 investment in these FTSE 100 and 250 stocks delivered higher returns appeared first on The Motley Fool UK.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. James J. McCombie has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Amazon and Netflix. The Motley Fool UK has recommended 4IMPRINT GROUP PLC ORD 38 6/13P. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
Motley Fool UK 2020