29
May

Twelve ASX stocks with record growth since 2000

I recently built a little web app called What If Stocks, to answer the question: based on a start and end date, and a pool of stocks and historical prices, what would have been the best stocks to invest in? This app isn't rocket science, it just ranks the stocks based on one simple metric: change in price during the selected period.

I imported into this app, price data from 2000 to 2018, for all ASX (Australian Securities Exchange) stocks that have existed for roughly the whole of that period. I then examined the results, for all possible 5-year and 10-year periods within that date range. I'd therefore like to share with you, what this app calculated to be the 12 Aussie stocks that have ranked No. 1, in terms of market price increase, for one or more of those periods.

1. Incitec Pivot (ASX:IPL)

No. 1 growth stock 2005-2015 ($0.0006 - $3.57, +595,000%), and 2006-2016

If you've never heard of this company before, don't worry, neither had I. Incitec Pivot is a fertiliser and explosives chemicals production company. It's the largest fertiliser manufacturer in Australia, and the second-largest explosives chemicals manufacturer in the world. It began in the early 2000s as the merger of former companies Incitec Fertilizers and the Pivot Group.

Incitec Pivot was a very cheaply priced stock for its first few years on the ASX, 2003-2005. Then, between 2005 and 2008, its value rocketed up as it acquired numerous other companies, and significantly expanded its manufacturing operations. So, in terms of a 5-year or 10-year return, it was a fabulous stock to invest in throughout the 2003-2007 period. However, its growth has been mediocre or poor since 2008.

2. Monadelphous Group (ASX:MND)

No. 1 growth stock 2000-2010 ($0.0119 - $7.19, +60,000%)

Monadelphous is a mining infrastructure (and other industrial infrastructure) construction company based in Perth. They build, expand, and manage big installations such as LNG plants, iron ore ports, oil pipelines, and water treatment plants, in Northern Australia and elsewhere.

By the volatile standards of the mining industry (which it's basically a part of), Monadelphous has experienced remarkably consistent growth. In particular, it enjoyed almost constant growth from 2000 to 2013, which means that, in terms of a 5-year or 10-year return, it was an excellent stock to invest in throughout the 2000-2007 period. Monadelphous is somewhat vulnerable to mining crashes, although it recovered well after the 2008 GFC. However, its growth has been mediocre or poor for much of the time since 2013.

3. Fortescue Metals Group (ASX:FMG)

No. 1 growth stock 2001-2011 ($0.0074 - $4.05, +55,000%), and 2002-2012, and 2003-2013

Fortescue is one of the world's largest iron ore producers. Started in the early 2000s as a tiny company, in the hands of Andrew Forrest (now one of Australia's richest people) it has grown to rival the long-time iron ore giants BHP and Rio Tinto. Fortescue owns and operates some of the world's largest iron ore mines, in the Pilbara region of Western Australia.

Fortescue was a small company and a low-value stock until 2006, when its share price shot up. Apart from a massive spike in 2008 (before the GFC), and various other high times since then, its price has remained relatively flat since then. So, in terms of a 5-year or 10-year return, it was an excellent investment throughout the 2000-2007 period. However, its growth has been mediocre or poor since 2008.

4. CTI Logistics (ASX:CLX)

No. 1 growth stock 2004-2014 ($0.0213 - $1.46, +6,800%)

CTI is a freight and heavy hauling company based in Perth. It does a fair chunk of its business hauling and storing materials for the mining industry. However, it also operates a strong consumer parcel delivery service.

CTI experienced its price surge almost entirely during 2005 and 2006. Since then, its price has been fairly stable, except that it rose somewhat during the 2010-2013 mining boom, and then fell back to its old levels during the 2014-2017 mining crash. In terms of a 5-year or 10-year return, it was a good investment throughout the 2000-2011 period.

5. Credit Corp Group (ASX:CCP)

No. 1 growth stock 2008-2018 ($0.59 - $19.52, +3,200%)

Credit Corp Group is a debt collection company. As that description suggests, and as some quick googling confirms, they're the kind of company you do not want to have dealings with. They are apparently one of those companies that hounds people who have unpaid phone bills, credit card bills, and the like.

Anyway, getting indebted persons to pay up (with interest, of course) is apparently a business that pays off, because Credit Corp has shown consistent growth for the entire period being analysed here. In terms of a 5-year or 10-year return, it was a solid investment for most of 2000-2018 (and it appears to still be on a growth trajectory), although it yielded not so great returns for those buying in 2003-2007. All up, one of the strongest growth stocks in this list.

6. Ainsworth Game Technology (ASX:AGI)

No. 1 growth stock 2008-2013 ($0.11 - $3.34, +2,800%), and 2009-2014

Ainsworth Game Technology is a poker machine (aka slot machine) manufacturing company. It's based in Sydney, where it no doubt enjoys plenty of business, NSW being home to half of all pokies in Australia, and to the second-largest number of pokies in the world, beaten only by Las Vegas.

Ainsworth stocks experienced fairly flat long-term growth during 2000-2011, but then in 2012 and 2013 the price rose significantly. They have been back on a downhill slide since then, but remain strong by historical standards. In terms of a 5-year or 10-year return, it was a good investment throughout 2003-2011, a good chunk of the period being analysed.

7. Copper Strike (ASX:CSE)

No. 1 growth stock 2010-2015 ($0.0095 - $0.23, +$2,300%)

Copper Strike is a mining company. It appears that in the past, it operated mines of its own (copper mines, as its name suggests). However, the only significant thing that it currently does, is make money as a large shareholder of another ASX-listed mining company, Syrah Resources (ASX:SYR), which Copper Strike spun off from itself in 2007, and whose principal activity is a graphite mine in Mozambique.

Copper Strike has experienced quite consistent strong growth since 2010. In terms of a 5-year or 10-year return, it has been a quality investment since 2004 (which is when it was founded and first listed). However, its relatively tiny market cap, plus the fact that it seems to lack any core business activity of its own, makes it a particularly risky investment for the future.

8. Domino's Pizza Enterprises (ASX:DMP)

No. 1 growth stock 2007-2017 ($2.13 - $50.63, +2,280%)

The only company on this list that absolutely everybody should have heard of, Domino's is Australia's largest pizza chain, and Australia is also home to the biggest market for Domino's in the world. Founded in Australia in 1983, Domino's has been a listed ASX company since 2005.

Domino's has been on a non-stop roller-coaster ride of growth and profit, ever since it first listed in 2005. In terms of a 5-year or 10-year return, it has been a fabulous investment since then, more-or-less up to the present day. However, the stock price of Domino's has been dealt a blow for the past two years or so, in the face of reported weak profits, and claims of widespread underpayment of its employees.

9. Vita Group (ASX:VTG)

No. 1 growth stock 2011-2016 ($0.14 - $3.12, +$2,100%)

Vita Group is the not-so-well-known name of a well-known Aussie brand, the mobile phone retail chain Fone Zone. Although these days, there are only a few Fone Zone branded stores left, and Vita's main business consists of the 100 or so Telstra retail outlets that it owns and manages across the country.

Vita's share price rose to a great peak in 2016, and then fell. In terms of overall performance since it was listed in 2005, Vita's growth has been fairly flat. In terms of a 5-year or 10-year return, it has been a decent investment throughout 2005-2013. Vita may experience strong growth again in future, but it appears more likely to be a low-growth stable investment (at best) from here on.

10. Red River Resources (ASX:RVR)

No. 1 growth stock 2013-2018 ($0.0153 - $0.31, +1,900%)

Red River is a zinc mining company. Its main operation is the Thalanga mine in northern Queensland.

Red River is one of the most volatile stocks in this list. Its price has gone up and down on many occasions. In terms of a 5-year or 10-year return, it was a good investment for 2011-2013, but it was a dud for investment for 2005-2010.

11. Pro Medicus (ASX:PME)

No. 1 growth stock 2012-2017 ($0.29 - $5.81, +1,870%)

Pro Medicus is a medical imaging software development company. Its flagship product, called Visage, provides a full suite of desktop and server software for use in radiology. Pro Medicus software is used by a number of health care providers in Australia, the US, and elsewhere.

Pro Medicus has been quite a modest stock for most of its history, reporting virtually flat price growth for a long time. However, since 2015 its price has rocketed up, and it's currently riding a big high. This has apparently been due to the company winning several big contracts, particularly with clinics in the US. It looks on track to continue delivering solid growth.

12. Macquarie Telecom Group (ASX:MAQ)

No. 1 growth stock 2007-2012 ($0.71 - $7.01, +885%)

Macquarie Telecom Group is an enterprise telecommunications and data hosting services company. It provides connectivity services and data centres for various Australian government departments, educational institutions, and medium-to-large businesses.

Macquarie Telecom's share price crashed quite dramatically after the dot-com boom around 2000, and didn't really recover again until after the GFC in 2009. It has been riding the cloud boom for some time now, and it appears to be stable in the long-term. In terms of a 5-year or 10-year return, its viability as a good investment has been patchy throughout the past two decades, with some years faring better than others.

Winners or duds?

How good an investment each of these stocks actually was or is, is a far more complex question than what I'm presenting here. But, for what it's worth, what you have here are 12 stocks which, if you happened to buy and sell any of them at exactly the right time in recent history, would have yielded more bang for your buck than any other stocks over the same period. Given the benefit of hindsight (which is always such a wonderful thing, isn't it?), I thought it would be a fun little exercise to identify the stocks that were winners, based on this most dead-simple of all measures.

The most interesting conclusion that I'd like to draw from this list, is what a surprisingly diverse range of industries it encompasses. There is, of course, an over-representation from mining and commodities (the "wild west" of boom-and-bust companies), with six of the stocks (half of the list) more-or-less being from that sector (although only three are actual mining companies – the others are in: chemical processing; mining infrastructure; and mining transport). However, the other six stocks are quite a mixed bag: finance; gambling; fast food; tech retail; health tech; and telco.

What can we learn from this list, about the types of companies that experience massive stock price growth? Well, to rule out one factor: they can be in any industry. Price surges can be attributed to a range of factors, but I'd say that, for the companies in this list, the most common factor has been the securing of new contracts and of new sales pipelines. For some, it has been all about the value of a particular item of goods or services soaring on the global market at a fortuitous moment. And for others, it has simply been a matter of solid management and consistently good service driving the value of the company up and up over a sustained period.

Some of these companies are considered to be actual winners, i.e. they're companies that the experts have identified, on various occasions, as good investments, for more reasons than just the market price growth that I've pointed out here. Other companies in this list are effectively duds, i.e. experts have generally cast doom and gloom upon them, or have barely bothered to analyse them at all.

I hope you enjoyed this run-down of Aussie stocks that, according to my number-crunching, could have been your cash cows, if only you had been armed with this crystal ball back in the day. In future, I'm hoping to improve What If Stocks to provide more insights, and I'm also hoping to analyse stocks in various other markets other than on the ASX.

Acknowledgement: all price data used in this analysis has been sourced from the Alpha Vantage API. All analysis is based on adjusted close prices, i.e. historical prices adjusted to reflect all corporate actions (stock splits, mergers, and so forth) that have occurred between the historical date and the current date.

Disclaimer: this article does not contain or constitute investment advice in any way. The author of this article has neither any qualifications nor any experience in finance or investment. The author has no position in any of the stocks mentioned, nor does the author endorse any of the stocks mentioned.

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