18 Growth Stocks: Final Thoughts
Jan 17th 2013 8:40PM
Updated Jan 18th 2013 6:45AM
As our 10-Bagger Portfolio approaches its one-year anniversary, our performance has been somewhat mixed. LinkedIn and Netflix have been big winners for us, but we've also had some pretty big losers, too. Overall, our portfolio is losing to the market, though it has delivered a positive return so far.
We never believed for a moment, however, that we'd be able to effectively assess our performance after only one year. Our true aim all along was to identify multibaggers for the long haul. Are we on track to deliver on that goal? Frankly, we believe it's too early to say.
Parting is such sweet sorrow
Sadly, we'll never know for certain how the 10-Bagger portfolio might have performed over a longer time horizon. After giving it a lot of thought, we decided to discontinue our management of the portfolio.
Recently, our day-to-day roles here at the Fool have been taking up more and more of our time, and we came to the stark realization that we could no longer devote the necessary attention to our 10-Bagger portfolio. Instead of keeping it alive and just checking in on it sporadically, we felt the prudent thing to do was to shut it down altogether. This was a very tough decision for us to make.
We didn't want to depart (so to speak) without providing some additional guidance to anyone out there who may have been following us. Below are some final thoughts on all 18 stocks in our portfolio:
1. Denbury Resources. The vulture of the oil patch continues to buy properties for its tertiary recovery technology. We believe this stock is still very attractive today.
2. Zipcar. It's hard to believe the company sold out to Avis, recently. The lesson from this investment is that growth investors don't like to see slowing growth. Ultimately, our total position in Zipcar is down 15%.
3. Infinera. The company's latest product, the DTN-X, continues to gain traction. A Tier 1 carrier signed on as a customer recently, which is a great sign.
4. MAKO Surgical . The orthopedic surgical robot maker has experienced a slowdown recently. But the company expects growth to pick up, and the price is very attractive today. Alas, this investment is our biggest loser - our total position is down around 46% at the moment.
5. InvenSense. InvenSense has one of the biggest tailwinds behind it: mobile computing. The motion sensor maker is tripling its chip production to take advantage of rising demand.
6. LinkedIn. LinkedIn is a purpose-driven company that is going to make lots of money over time. That's a great combination, and we expect the professional networking company to be a big winner for investors. Our total position is up 63%.
7. Fusion-io. Fusion-io has been a disappointment so far. The company has a nice technology that's catching on, but the market just won't get behind the stock.
8. Google. Google wants to become the go-to information platform over the next five to 10 years. We think it's very likely that the company will achieve its goal, and believe the stock is cheap today.
9. Apple. Apple's stock has gone from hot to not almost overnight. Over the past year, we've been very bullish on the company. We still like it, and think investors are being shortsighted about the company's prospects.
10. Facebook . Unlike Apple, Facebook has gone from zero to hero. And it's well deserved, as the social networking company is making great strides with its advertising platform. We were early investors in Facebook, and many thought it was folly at the time. Our overall position is up 19%, however.
11. Intel. Our thesis was that Intel would enter the mobile computing market, and make an impact. We wonder if that outlook will actually play out in time. At least Intel has a nice yield, and dominates the PC and server markets. We're not as bullish on this company as we were when we first recommended it, however.
12. Solazyme. The biofuels company continues to make progress by adding manufacturing capacity. If the economics improve, the stock can still be a long-term winner. But it's a risky bet, and only deserves a tiny portion of a portfolio.
13. ExxonMobil. The leading global energy company remains an attractive investment, and will continue to serve shareholders by investing in great projects, increasing its dividend, and repurchasing shares.
14. Netflix. Netflix continues to make excellent content deals. This will attract incremental streaming members, who are very, very valuable. The company was also one of our big winners - our total position is up 49%.
15. TripAdvisor . The online travel research firm continues to grow at a very nice clip, making the company's moat stronger. This one is up 31% for us.
16. Starbucks. With Howard Schultz at the helm, Starbucks will remain dominant for a very long time. And we love how it's building relationships with customers using social media.
17. Enphase Energy. The microinverter maker for solar panels continues to push forward. Like Solazyme, success is not guaranteed and any investment should be a very small allocation.
18. Spectra Energy. The pipeline company isn't going to be displaced anytime soon, which means those dividend checks will keep flowing into investors' brokerage accounts.
Continuing the journey
If you'd like to continue hunting for multibaggers in the future, we highly recommend our Motley Fool Rule Breakers investing service, which offers up the type of growth ideas we were looking for. If it's free stock ideas that you're after, then be sure to take a closer look at all of the portfolios on our "Real-Money Stock Picks" page.
The article 18 Growth Stocks: Final Thoughts originally appeared on Fool.com.David Meier owns shares of MAKO Surgical, Apple, Zipcar, Infinera, and InvenSense. John Reeves owns shares of Apple, Google, Denbury Resources, and Starbucks. The Motley Fool recommends Facebook, LinkedIn, MAKO Surgical , Netflix, and TripAdvisor. The Motley Fool owns shares of Facebook, LinkedIn, MAKO Surgical , Netflix, and TripAdvisor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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