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Best performing stocks: what did well in 2019 – and what might do well in 2020

By Connor Freitas

What were the best performing stocks of 2019, and what’s next for the likes of Tesla, Netflix and Amazon? Here, we take a look

Best performing stocks: What did well in 2019 and what might do well in 2020

Looking to the best performing stocks of last year can provide a precious insight into the trends dominating the market – but of course, it isn’t always an accurate indicator of what will happen in future. Here, we’re going to look at the hot stocks of 2019 and pay particular attention to the share prices of three well-known companies: Tesla, Netflix and Amazon.

Best performing stocks of 2019

Let’s begin by focusing on the companies that enjoyed explosive levels of growth in London and New York. One of the top performing stocks on the UK’s FTSE 100 in 2019 was JD Sports. Despite large swathes of the retail sector struggling to compete with online giants such as Amazon, investors seemed impressed with the brand’s plans to broaden its footprint and establish a larger presence in Europe, Asia and the US. Over a 12-month period, JD’s share price rose from about 363p to 837p – a rise of 130 per cent.

Another stock that seemingly came from nowhere was Future plc. The media company’s stock had a blockbuster 2019 – ballooning from about 470p at the start of the year to 1,450p by the end. Getting the calculator out, that’s an extraordinary uplift of 208 per cent. According to Deutsche Bank, much of this growth was driven by “value-enhancing mergers and acquisitions and strong underlying growth”. It just goes to show that there may still be life in specialist magazine publishers.

We’ll also give an honourable mention to two other retailers as we wrap up our look at London: Pets at Home and Dunelm. After starting the year at a meagre 119.50p, Pets leapfrogged to 279.60p come New Year’s Eve. There’s little doubt that the 134 per cent boost to its share price would have got tails wagging in the City. Dunelm, the furnishings retailer, was also sitting comfortably in 2019. Its share price was 578p or so at the start of January and stood at 1,156p at the end of December.

Now let’s turn our attention to the best-performing shares in New York last year. Advanced Micro Devices (known as AMD) did particularly well. The company is perhaps best known for its computer processors and logged an impressive 142 per cent growth in 2019. Much of this growth was on the back of some substantial contract signings – with AMD confirmed as the chip provider for upcoming games consoles from Sony and Microsoft alike. Sticking with the theme of semiconductors, Lam Research also did well – rocketing from $138 to $292 over 2019, a healthy uplift of 111.5 per cent.

Last but not least, a company that did well in surpassing analyst targets was… er, Target. It’s one of the biggest retailers in the US, and during 2019, its share price leapt from $66 to $128 – growth that’s just shy of 94 per cent. The stock’s journey wasn’t without the odd bump in the road, but its results easily outperformed Wall Street’s predictions – and outshone industry behemoths such as Walmart.

Now we’ve taken a broader look at what’s happened in the market, let’s zoom in on three stocks for companies that have become household names.

Best performing stocks today: Tesla? Amazon? Netflix?

Naturally, we have to begin with Tesla. The electric vehicle manufacturer, headed by eccentric CEO Elon Musk, has a devoted fan base – and for those with the foresight to purchase shares, that loyalty has paid off. The Tesla stock price soared by 36 per cent to reach $887 in the space of two days at the start of February. Overall, the value of these shares had more than doubled since 2020 began.

Even though the company made a loss across the whole of 2019, the carmaker did manage to notch up its second consecutive quarter of profit. Many analysts believe that Tesla is beginning to bring its finances under tighter control and are impressed with its ambitious growth plans – with “gigafactories” based in Europe and China set to roll out models at a lower cost to consumers on both continents. But is Tesla a good investment? This is a tricky question to answer and it’s crucial to do your own analysis – not least because its share price has cooled recently – but strategists believe that its dominance in the electric battery space means it is well positioned for the upcoming pivot away from diesel and petrol cars. Investment firm ARK thinks that the Tesla stock price could reach an astounding $7,000 in just five years.

Is Netflix a good investment? Again, it’s difficult to offer advice here. Although the company has a firm foothold in the streaming space, it is beginning to face some stiff levels of competition. Disney and Apple have launched their own offerings – pouring billions of dollars into original content – and legacy broadcasters such as NBC and HBO are also beginning to mount their defence. All of this could result in a price war that drives down the price of subscriptions, hurting revenue, despite how Netflix will have to up its spending to deliver must-watch TV shows and movies.

Investors don’t seem to have been disheartened so far. The Netflix shares price began January 2020 just shy of $330 – a very healthy price when the past two years are taken into account – and stood at $371 at the time of writing, up 12.4 per cent. Although it has been struggling to meet expectations when it comes to growth in US-based subscribers, demand in other territories has been exceedingly healthy.

Finally, let’s contemplate the Amazon shares price. Continually a darling of Wall Street, the e-commerce giant’s shares are up 10.3 per cent year to date – advancing from about $1,900 to almost $2,100. The most recent leap followed quarterly earnings that confirmed the company had surpassed expectations across multiple fronts. Amazon Prime, which ensures that products are delivered quickly – often on the same day or within 24 hours – proved to be a particular boon over Christmas. Is Amazon a good investment? Much of that depends on whether you think that the e-commerce giant’s share price still has room to grow given how it’s trading at record highs.

And that’s where we are. A lot of uncertainty lies ahead in 2020 – with the coronavirus, the US presidential election and other factors a concern – and, as the year has barely begun, it’s entirely possible that hot stocks haven’t had their breakthrough moment yet. After all, few people would have predicted Tesla’s box office returns back in February 2019.

FURTHER READING: $1,780 downside target: Amazon stock analysis

FURTHER READING: Tesla stock surges as company extends profit run

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