Roughly one year ago, amid unprecedented volatility, the broad-based S&P 500 hit its bear market bottom. Since that point, investors have sat back and enjoyed a historically strong gain of 77% in the widely followed index.
But for some stocks, a 77% bounce off of their coronavirus pandemic lows would be considered peanuts. According to data from Finviz, 301 large-cap stocks (companies with a market value of $10 billion or higher) have at least doubled over the trailing 12 months. Further, 89 have at least tripled, and 29 are up no less than 400%.
However, five large-cap stocks stand head-and-shoulders above the rest of the pack. If you had the foresight and stomach to invest $100,000 in each of the following five companies a year ago (as of March 17, 2021), you'd be sitting on anywhere from $1.2 million to nearly $5 million as of today.
Image source: Getty Images.
Plug Power: $1.2 million
The fifth best-performing large-cap over the trailing 12 months is hydrogen fuel-cell solutions company Plug Power (PLUG -5.29%). A $100,000 investment in Plug around mid-March would be worth about $1.2 million today.
One of the biggest catalysts in Plug's sails is the Biden administration. President Joe Biden's victory in November, followed by Democrats winning a slim majority in the Senate, meant that Democrats would potentially have a pathway forward to pass clean-energy bills. With the current administration focused on renewable and clean-energy sources, it's quite possible that Plug's fuel-cell solutions could be one of the touted solutions.
Plug Power also benefited in January by announcing two huge joint ventures. First, South Korea's SK Group took a 10% stake in the company. Plug and SK Group will work together to bring fuel cell technology to vehicles and refilling stations in South Korea. Just a week later, Plug Power and French automaker Renault signed a joint venture to focus on fuel-cell solutions for the light commercial vehicle market in Europe.
Although sales expectations for Plug Power have moved up substantially in recent months, it's possible the company's underlying technology, or the fuel-cell industry in general, may need time to mature.
The NIO EC6 crossover launched in 2020. Image source: NIO.
NIO: $1.54 million
Have I mentioned that alternative energy solutions are hot? Despite its 716% trailing-year gain, electric-vehicle giant Tesla played second-fiddle to China-based NIO (NIO -5.24%) in the return column. NIO's 1,443% gain has doubled-up Tesla over the trailing year, and would have turned a $100,000 investment into a cool $1.54 million.
The answer to "Why NIO?" has to do with both the future of the auto industry and the market it's operating in. China is expected to be the world's largest consumer of EVs. What's more, approximately half of all vehicles sold by 2035 are expected to be run on alternative energy (95% of which will be EVs), according to the Society of Automotive Engineers of China. Last year, NIO more than doubled its full-year deliveries, with the company launching its EC6 crossover and recently announcing a new luxury sedan, the ET7.
NIO has also drummed-up interest with its battery-as-a-service program. This program enrolls buyers into a fee-based monthly program and, in return, grants them a reduction in the purchase price of a new EV. NIO is choosing to sacrifice upfront margin in order to lock in loyal customers and bring in high-margin fee revenue over the long haul.
Nevertheless, a $70 billion market cap for a company that's delivered only 88,444 vehicles since inception might prove a bit too aggressive.
Image source: Getty Images.
Penn National Gaming: $1.7 million
Investors that rolled the dice on gaming property and sports betting company Penn National Gaming (PENN 2.46%) are also sitting pretty. Like a horse sprinting around the racetrack, Penn National has returned a hair shy of 1,600% over the past year. This would have turned $100,000 into a not-so-shabby $1.7 million.
The Penn National Gaming rocket launch is tied to two factors. First of all, the company's traditional gaming operations aren't set up in exclusive markets or in destinations exclusively tied to travel. This is to say that the gaming properties Penn operates are welcoming to locals and in-state residents. When the coronavirus brought Las Vegas to a crawl, Penn wasn't nearly affected as much, since its gaming properties are located in 20 states throughout the country.
The other obvious factor here is Penn National's equity investment in Barstool Sports. Online sports betting is blossoming before our eyes. In roughly a year, we've watched as more than a dozen states have given the green light to sports betting, with a number of other states potentially on-deck. According to Morgan Stanley, the potential legalization of sports betting nationwide could lead to $15 billion in annual revenue by mid-decade. That bodes extremely well for Penn's partnership with Barstool.
Image source: Getty Images.
Novavax: $2.37 million
Perhaps it's no surprise that one of the top-performing large-caps over the past year is a biotech stock engaged in the development of a coronavirus disease 2019 (COVID-19) vaccine. Shares of Novavax (NVAX -1.32%) have skyrocketed by nearly 2,300%, which would have turned a $100,000 investment into a whopping $2.37 million.
Novavax recently released its final efficacy data from its late-stage study in the U.K. of NVX-CoV2373. The company's vaccine proved 96.4% effective against the original strain of the COVID-19 virus and 86.3% effective against a variant that's been circulating in the United Kingdom. Novavax's vaccine candidate was less effective (55.4% efficacy in HIV-negative participants) in a phase 2b study in South Africa, where a separate variant has been circulating.
It's no secret that vaccinating more than 7 billion people globally is going to be a challenge. With it looking unlikely that COVID-19 will be going away anytime soon, there's a real opportunity for Novavax to turn NVX-CoV2373 unto a recurring revenue stream. It would be especially helpful if the company's vaccine candidate were to get a green light from the U.S. Food and Drug Administration by May.
Image source: Getty Images.
GameStop: $4.96 million
As if there was any doubt, video game and accessories retailer GameStop (GME -1.59%) is the king of the castle among large-cap stocks. With a gain approaching 4,900% over the trailing 12 months, GameStop would have turned a $100,000 investment into almost $5 million.
While it'd be nice to believe that the company's 309% e-commerce growth during the 2020 holiday season is driving this share price appreciation, the reality is that this is the work of retail investors on Reddit.
GameStop entered January as the most short-sold stock, relative to its float. For short-term and young investors, this made it the perfect target. Reddit investors essentially banded together and bought stock and out-of-the-money options to effect a short squeeze in GameStop. A short squeeze sends pessimists holding shares short (mostly institutional investors and hedge funds) scurrying for the exit at the same time. To exit their positions, short-sellers must buy to cover, which only exacerbates the upward move in a stock.
Without question, GameStop is the most successful, and most dangerous, large-cap on this list. GameStop waited far too long to shift its focus to digital gaming, and as a result is probably staring down its fourth consecutive year of losses in 2021. Despite its recent outperformance, it shouldn't be in investors' portfolios.