TheStreet has compiled a list of 2020's top 25 stocks of the year, just as we did in 2019. TheStreet writers and experts evaluated stock performance, quarterly results versus expectations and execution against strategy in a challenging year dominated by the coronavirus pandemic.
Please read TheStreet.com each morning between now and Monday, Dec. 21, when we'll be announcing the Stock of the Year, to check out our latest picks.
2020 stock performance*: +38%
In a year when a long list of retailers has filed for bankruptcy, Nike (NKE) - Get Report has experienced tremendous e-commerce growth. The digital business was already Nike's fastest-growing channel before the pandemic, but digital sales surged 82% in the fiscal 2021 first quarter that ended in August. “Nike is growing earnings faster than sales through the acceleration of its digital transformation journey and by focusing on increasing direct-to-consumer sales,” the Action Alerts team said. “Nike's digital presence is one of the best in retail thanks to its superior technology, membership programs, an ecosystem of platforms, and a leadership team with plenty of digital experience under CEO John Donahoe.”
2020 stock performance*: +129%
In 2020, Spotify (SPOT) - Get Report moved from the world’s most popular music streaming service to the biggest story in digital audio entertainment. A strategic investment in podcasts gives the company tremendous leverage to build a business that looks a lot like linear radio, except with targeted digital ads. The change means better margins and a new revenue stream.
2020 stock performance*: +449%
Online luxury marketplace Farfetch (FTCH) - Get Report is finally seeing its value realized by Wall Street. A big recent run-up has added to its stellar gains in 2020, making it one of the best-performing stocks with a market cap above $5 billion. The company has delivered more than 70% revenue growth each quarter this year (three quarters into its fiscal year), including 90.4% growth in the “coronavirus Q1.” Further, its biggest beat just came in the most recent quarter, with record gross merchandise volume and as margins continue to improve. In the words of CEO José Neves: “What we are seeing is the acceleration of the secular trend of online adoption in luxury -- an industry that is still very underpenetrated.”
2020 stock performance*: +124%
This was my big selection in 2019 and this past year saw Roku (ROKU) - Get Report rise up strongly and gain significant market share. Even the covid ’stay at home’ trend helped them gain users, and with more deals from big content providers, we see Roku has positioned themselves for substantial gains. It was one of the best-performing tech names in 2020 and that could continue in the year ahead. It has so much content now, and advertising dollars keep rolling in. Roku meets the challenge.
2020 stock performance*: +158%
Pet adoption is up as a result of remote work, and we could see that continuing to boost things for Chewy (CHWY) - Get Report. E-commerce is an industry that will not revert back to brick-and-mortar since of all the reasons people are excited for a vaccine, rushing out to buy dog food is not one of them -- that’s a permanent acceleration, not just a COVID boost. 70% of auto-ship & factories are becoming increasingly automated. Customers also spend more the longer they are with the company, so new customers now will likely grow tier basket sizes in the coming years.
Chewy also has plenty of options to enter new areas of the pet industry (they previously entered the pharmacy space and began offering online vet visits) as the company looks to become the one-stop-shop for any and all pet needs. The company also has incredible customer service, which is crucial given that any pet owner will tell you their pet is a part of the family, and a CEO who understands customer service and e-commerce, seeing that “from 2015 to 2017, Mr. Singh served as the Worldwide Director of Amazon.com’s consumables businesses (fresh and pantry) and, from 2013 to 2015, as Director and General Manager of Amazon, Inc.’s North American merchant fulfillment and third-party businesses.”
* As of Dec. 7 close
How TheStreet Calculated the Best Stocks of the Year
TheStreet polled a group of 16 writers and editors at TheStreet, RealMoney, Action Alerts Plus, Stocks Under $10 and Trifecta Stocks and asked them to nominate candidates, and then narrowed that list down to the top 25 stocks. We then asked each of those writers and editors to rank the top 25 from top to bottom, assigning 25 points for a No. 1 ranking, 24 points for a No. 2 ranking, etc. We then totaled the points for each stock to arrive at our final rankings.
The result is a comprehensive list of the stocks that performed and executed the best in 2020, helping drive the S&P 500’s rebound from its pandemic-induced lows in March.