Stock Reports Yearly Review

Well, for the most part, 2020 was an absolute shocker of a year. I don’t really need to go into details, do I? I would imagine that most of us were more than happy to see the back of it last week when we cautiously ticked over into 2021. Let’s hope that this year brings a little more stability on the social front.

Despite all of this, there was one area where we here at Capital 19 had an absolute ripper of a year. Our stock recommendations were almost faultless, with some verified humdingers and only a couple of real disappointments. Of the 45 stocks we recommended throughout the year we had 40 finish with gains and only 5 losses amongst them (although 3 winners didn’t manage to fall down to our recommended buy price). Overall we finished with an impressive portfolio gain of 48.27%. That’s easily outperformed all of the major indices which ended the year with gains of 43.6% for the Nasdaq, 16.3% for the S&P500, and 7.3% for the Dow.

If you add our stock recommendations from 2019 ( we first started publishing them in June of that year) it gives us a total of 55 stock picks with 50 winners and still only 5 losers. The total portfolio gain sits at 57.40% which is a track record I’d be happy to stack up against anyones.

There’s a couple of reasons why I think our stock recommendations have, for the most part, outperformed during what could only be described as a turbulent time in the markets. When picking a stock we have it in our head that we will be holding it for the long term. I’d like to think almost all of them will still be in our portfolios in ten years. We, therefore, try to go for quality, rather than your flash in the pan type stocks.

Take a look at some of our early picks. Pre-pandemic that is. You’ll find names such as Adobe (+70.41%), Walt Disney (+23.99%), Microsoft (+62.59), Google (+51.01%) Atlassian (+78.19%), and Tesla (+565%). All top line stocks we’ll be holding for years, with the exception of Tesla which we have since viewed as too expensive for the time being. Stocks tend to do that when they rise more than 500% in a year. Add to this a few a solid bets in the tech industry such as Service Now (+98.85%), Roku (+233.70%), Zillow (+161.33%), and the one that got away Taiwan Semiconductor (+147.62%) which never quite fell to our $37 buying price, and you have a solid base for a portfolio. All of these stocks sailed through the stock market collapse and came out the other side smelling like roses.

The only pre-pandemic stock that gave us a touch up was when we purchased United Airlines (-44.56%) back in February, just weeks before the world came to a standstill and aeroplanes were grounded globally. Oh for a crystal ball! McDonald’s (-1.52%) our only other pre-pandemic loser, and which is very nearly back to its buy price, was also purchased in February and is another victim of the shutdowns brought about by the coronavirus. We still expect it to get back on its feet as we return to normality in the next year or so.

The post-pandemic stock recommendations were a lot of fun as we did some serious bottom fishing to find those quality stocks that had been smashed by a global economic recession and a stock market that had dropped by more than 40%. To this, we added a list of stocks that we thought would benefit from the pandemic but had not yet reached their true value. Zoom (+227.55%) stands out as a perfect example. We didn’t quite pick it up at the bottom of the market, but we realised early on that it had a long way to run and it responded by giving us gains of more than 200% in around 6 months.

On the angling front, we picked up three of my favourite stocks in March and April for absolute bargain basement prices. We purchased PayPal (+110.03%) and Nvidia (+96.58%) in March, and Apple (+101.30%) at the start of April, and all have brought handsome rewards and doubled in price (although Nvidia has just fallen back under the 100% mark). Other sitting ducks included Amazon (+75.67) in March, Ford (+76.40%) in May, and the cruise lines as late as October showing there are still pandemic bargains to be found even today.

Stocks that were purchased with an eye to benefitting from the Coronavirus included videogame maker TakeTwo interactive (+80.76%), and clinical laboratory provider and drug developer Laboratory Corp (+88.79%). Drug development platform provider Schrodinger (+84.70%) was another speccy, along with golf equipment maker Callaway (+73.57%), covid 19 testing winner Danaher (+35.37%), and online shopping guru Shopify (+52.67%). All have done exactly as intended and kept our portfolios higher than most.

Perhaps my favourite winner of the year was from June when I decided to throw some solar panels on my roof at home and went on a sudden deep dive into the world of renewable energy. Renewable Energy Group (+175.64%) looked like an interesting prospect. They are, as I wrote in June, “North America’s largest producer of advanced biofuel. They use their own integrated procurement, distribution, and logistics network to convert natural fats, oils, greases and sugars into biodiesel”. They were copping a hammering from the fall in oil prices that came with global shutdowns (a fall in oil prices isn’t good for them), and a poor earnings report and guidance which blamed a struggling economy and internal calculation errors. But it was always bound to turn around – I just didn’t anticipate how quickly. With a gain of 170% odd in just six months it has officially become my favourite stock of the year.

All in all, it was an impressive year on the stock-picking front. We’re really happy with the way our recommendations have performed and we hope as many of you as possible have been following along and adding them to your portfolios as we went. You can see the full list of all of our stock report subjects below and how they have performed since their publication date. We also run a host of model portfolios that include many of the stocks mentioned here today. You can read all about them here: Let’s hope we have a just as successful year in 2021!

Cheers, Paul.

Company Name Ticker Purchase Date Gain/Loss
Adobe ADBE 7/06/2019 70.41%
Atlassian TEAM 14/06/2019 78.19%
Service Now NOW 14/06/2019 98.85%
Walt Disney DIS 28/06/2019 23.99%
Zillow Z 3/07/2019 161.33%
Microsoft MSFT 7/08/2019 62.59%
Google GOOGL 16/08/2019 51.01%
Taiwan Semiconductor TSM 22/08/2019 147.62%
Roku ROKU 26/08/2019 233.70%
United Airlines UAL 28/01/2020 -44.56%
Tesla TSLA 17/02/2020 565.00%
McDonald’s MCD 14/02/2020 -1.52%
Schrodinger SDGR 24/02/2020 84.70%
Zoom ZM 6/03/2020 227.55%
American Express AXP 6/03/2020 11.45%
Amazon AMZN 6/03/2020 75.67%
Avery Dennison AVY 11/03/2020 42.65%
PayPal Holdings PYPL 13/03/2020 110.03%
TakeTwo Interactive TTWO 20/03/2020 80.76%
Laboratory Corp of America LH 23/03/2020 88.79%
Nvidia NVDA 25/03/2020 96.58%
Chevron CVX 6/04/2020 3.18%
Apple AAPL 13/04/2020 101.30%
Bank of America BAC 23/04/2020 32.44%
Danaher DHR 28/04/2020 35.37%
Ford F 7/05/2020 76.40%
Callaway ELY 15/07/2020 73.57%
Jack Henry & Associates JKHY 20/05/2020 -11.51%
Shopify SHOP 21/05/2020 52.67%
Constellation Brands STZ 5/06/2020 19.23%
Walmart WMT 12/06/2020 20.00%
Renewable Energy Group REGI 25/06/2020 175.64%
Raytheon Technology RTX 1/07/2020 15.31%
Coca-Cola KO 9/07/2020 14.89%
Gold GLD 16/07/2020 4.76%
PepsiCo PEP 27/07/2020 7.30%
Okta OKTA 11/08/2020 33.42%
Netease NTES 11/08/2020 3.82%
Twitter TWTR 27/08/2020 34.59%
Molson Coors TAP 3/09/2020 19.84%
Huya HUYA 10/09/2020 -24.00%
Facebook FB 5/10/2020 4.55%
Royal Caribbean Group RCL 8/10/2020 3.33%
Carnival Cruise Lines CCL 8/10/2020 37.28%
Norwegian Cruise Line Holdings NCLH 8/10/2020 39.45%
Brookfield Renewable Partner BEP 15/10/2020 16.67%
Nike NKE 2/10/2020 11.90%
Sturm Ruger RGR 29/10/2020 -5.64%
Align Technology ALGN 30/10/2020 22.07%
Visa V 12/11/2020 2.88%
Draft Kings DKNG 23/11/2020 0.17%
Citrix Systems CTXS 26/11/2020 6.56%
Skechers SKX 3/12/2020 4.36%
Yum Brands YUM 10/12/2020 3.25%