Christmas comes but once a year, but a portfolio with huge returns is the gift that just keeps on giving. That’s why we’re taking the end of the year to look back at those investments that, should you have bought in January, will likely be making you feel especially festive right about now. And kids, if you’re reading this and you’re aware that mommy or daddy have these investments, push for a biggest and best toys this year. They’re good for it.
RadNet Inc. (RDNT)
Getting an investment to quintuple in 12 months isn’t easy, but that’s precisely what stock in medical imaging company RadNet did in 2014.
On the surface, this has the look of the classic spike that small-cap health care companies are wont to make. No revenue, no earnings, but a successful clinical trial and the stock’s off and running. Au contraire, my friends, RadNet soared this year by (gasp!) making money. No hot biotech is this one. No, RadNet is a service provider with actual physical locations and, you know, book value. Weird.
RadNet operates 233 centers in seven states where physicians can get imaging services like MRIs done. This makes them the nation’s largest outpatient imaging services provider, and it’s been a pretty sweet gig for them. After posting earnings beats all year, RadNet’s been soaring in a big way.
Okay, so while RadNet may not be your typical small-cap biotech success story, Receptos pretty much is. The company is soaring this year after the success of its lead therapy, RPC1063, in Phase II clinical trials. It’s an oral therapy that can (hypothetically) be used to treat multiple sclerosis and irritable bowel syndrome. I’m not at all sure how one pill could treat both of those diseases, but then I’m not a doctor.
I am, however, capable of noting that the stock is up well over 350% in 2014, making it a pretty spectacular buy if you got in early.
Not to gloat, but it should be noted that we TOLD you to invest in Receptos. It was among our Small-Cap Stars, meaning that the company exhibited a profile of fundamentals at the start of the year that were consistent with previous top performers for its sector and industry. We obviously didn’t anticipate the solid topline results for RPC1063, but the Small-Cap Stars system is geared towards recognizing which companies are in the best position to take advantage of what success they do find or to work through any initial failures and still create value for shareholders.
In this case, we clearly picked a winner. Okay, I’m being generous with “we” there. Nick picked a winner.
TG Therapeutics (TGTX)
Okay, so this one is, admittedly, pretty similar to Receptos. Once again, we have a small-cap biotech company making no money at present but soaring on promising clinical trials for its lead therapies. The stock’s pretty much quadrupled in 2014 after its two therapies, TG-1101 and TGR-1202, both showed promise in clinical trials over the course of the year.
And, once again, we’re looking at a stock that we here at www.equities.com told you was among a basket of the most promising small-cap companies in its industries with our Small-Cap Stars system. So, hate to say I told you so but…that’s not true, we love saying that.
It’s a testament to just how well futures markets work to smooth out price fluctuations for consumers that the vast majority of the American public has no idea that anything really dramatic has been happening in the coffee market of late. People walking into Starbucks (SBUX) are paying essentially the same for a cup of coffee as they always have.
This is, however, a carefully constructed illusion. Coffee has shot up in price nearly 50% in 2014, hitting three-year highs. This is due in part to the crash in coffee prices at the end of 2013 caused by a very rainy season in Brazil. This was followed up by a pretty astonishing reversal after Brazil went from record rains to the worst drought since the country has been keeping track of this stuff.
So, in a matter of months we went from drastic oversupply and rock-bottom prices to drastic shortages and soaring coffee prices. Go figure. All told, it’s been a pretty wild ride for coffee in 2014, but if you started buying up coffee futures in early January, you’re certainly sitting pretty right now.
First Trust NYSE Arca Biotech ETF (FBT)
So the presence of the first three stocks mentioned in this article should make it clear that biotech had a pretty great year. Actually, a second consecutive great year, which is interesting because it didn’t seem like biotech could match the massive returns of 2013 without some sort of major correction. Turns out, it absolutely could.
The fastest way to spot this is to take a look at your biotech ETFs, all of which have been performing extremely well despite early hiccups over whether or not the country was having serious second thoughts about just how much money was to be made by pharmaceutical companies.
As such, the top-performing non-leveraged ETF for 2014 is looking like it’s going to end up being the First Trust biotech ETF after it gained over 50% over the course of the year.
Southwest Airlines (LUV) : Top Performer of the S&P 500
A lot of you, at this point, may be feeling a little miffed. Most of us don’t have the sort of cash and time necessary to roll the dice on small-cap stocks or commodities. What about the blue chips? The stocks that are stable enough that the majority of the investing public can actually jump on board, you going to mention any of those, smart guy? Yes, I am. Relax!
So, turning to the major indices, Southwest Airlines proved to be the top-performing stock on the S&P 500 for 2014. This may seem curious as airlines find it notoriously difficult to make any money. Southwest, though, continues its lengthy streak of producing profit and doing so without doing as much to aggravate its customer base as most other airlines.
But, Southwest, with its adorable ticker, does continue to offer up profits and has been more than kind to shareholders over the year.
Intel (INTC) : Top Performer of the Dow Jones Industrial Average
I have made no secret about the low regard I hold the Dow Jones index in. It’s really low. As indices go, the Dow is an archaic and ineffective measure for…well, almost anything.
That said, I don’t really have any choice about acknowledging just how many people use the DJIA as their only real connection to market performance. Sigh. So, with that in mind, here’s your top performer of the 30 stocks that make up the DJIA for 2014: Intel.
The company’s been making money hand over fist, including a nearly 45% quarter-over-quarter leap in net profit for Q2 of this year.
Happy Holidays, Investors!
So if you’ve jumped into any of these investments this year, odds are you’re having a very happy holiday, indeed. That said, maybe don’t be so quick to blow your newfound cash so quick. As good as things may have gone this year, investing has a way of going through ups and downs and today’s gains can be a real help if/when your portfolio experiences a correction.