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All Contents © 2018The Kiplinger Washington Editors
By James Brumley
| December 26, 2017
Though it's not over yet, barring an unexpected catastrophe, 2017 will be remembered as a great year for the market. As of the latest look, the S&P 500 was up nearly 19% since the end of last year, and still going strong.
Not every name got on board with the rally though. Indeed, several surprising names tanked in 2017. Conversely, other names—many of which were also surprises—blazed a bullish trail for others to follow over the course of the past twelve months.
With that as the backdrop, here's a quick review of this year's most noteworthy stock market success stories for companies outside of the inherently volatile small-cap world. The look may not explore the 10 very biggest gains dished out in 2017, but this list does explore the big wins that many investors just didn't see coming.
In order from least to most…
Prices and data are from the original InvestorPlace story published on Dec. 12. Click on ticker-symbol links in each slide for current prices and more.
This slide show is from InvestorPlace, not the Kiplinger editorial staff.
If you think e-commerce giant Amazon.com (AMZN) is making life impossible for any other mail-order or online-shopping venue, think again. Wayfair (W) is on pace for revenue growth of 37% this year, and expected to pump up the top line to the tune of 29% next year.
Its third-quarter loss grew year-over-over, mind you, calling into question analyst assumptions that next year's loss would be smaller than 2017's. W stock plunged the day that news came out.
Traders somehow keep finding a reason to come back to this name, though, maybe without even knowing why. At least part of the explanation is that where Amazon's size has made it impersonal, Wayfair's smaller size has allowed it to pay attention to personal details.
Wayfair stock is up 114% so far this year.
Hasn't solar-mania come and gone (a couple of different times, in fact)? Yes it has, but that hasn't turned into a headwind for solar power outfit First Solar (FSLR). FSLR shares are up an impressive 116% year-to-date.
While the mania has cooled down quite a bit, solar power as an industry has actually continued to mature. At the same time, panel makers have finally made the technology efficient enough to make it an easy, cost-effective sell. First Solar's Series 6 panels are a prime example of this premise. The Series 6 boasts a power-rating of between 420 and 445 watts, and is 17% efficient... a beast among thin-film solar PV panels.
Though it was only officially unveiled earlier this month, investors knew it was coming all year long, and were well aware of what a game-changer it could be.
Shopify via Flickr
Shopify (SHOP) is the trade nobody saw coming this year. Shopify, which helps companies develop an e-commerce presence, has rewarded shareholders with a 135% gain since the last day of 2016. Making the bullish run even more impressive is the hurdle the company had to overcome in the meantime.
In early October, known short-seller Andrew Left, of Citron Research, made a seemingly cogent bearish case on SHOP stock, suggesting its advertising was not just misleading, but illegally so. The stock peeled back at first, but the selling effort was quelled pretty quickly. Shopify shares have since started to test the waters of a turnaround.
What do you get when you cross Twitter (TWTR) and Facebook (FB) in China (where both are banned, by the way)? You get a Sina Weibo, or as it's called by the micro-blogging platform's owner/operator, just Weibo (WB).
It has been a smash hit, to say the least. Top-line growth is on pace for 22% next year, with per-share earnings growth projected at 76%. It dominates the nation's social networking scene, and has leveraged its size into more growth. That has been the trajectory for a while now, hence the stock's 150% gain so far this year.
And yet, it has only scratched the surface. Barclays analyst Gregory Zhao recently reiterated his bullish stance on WB, explaining "our positive view on WB's rev growth potential is mainly underpinned by the substantial upside of newsfeed ad's relatively low market share in China, which is only 14% now."
By most standards, it's an all-American success story. Start with a novel solution to a problem, create it, work to sell the daylights out of it, and once established, start selling all sorts of add-on products to your existing customer base.
That's exactly what Square (SQ) did. In 2009, the company came up with a way of turning a smartphone into a credit card acceptance device by attaching a simple white square to it. The rest, as they say, is history. Revenue is projected to grow 32% next year, driving a 73% improvement in per-share income.
Square's viability is no longer in dispute, prompting a 179% gain from SQ so far in 2017. Bolstering the rally is the company's foray into more traditional banking services.
Universal Display Corporation (OLED) isn't exactly a household name, though its technologies are increasingly found in more and more households. The company makes—well, mostly licenses—computer display screens that utilize organic light emitting diodes. It's a technology that's superior to alternatives for a handful of reasons; chief among them is a clearer image. To put it in perspective, iPhone maker Apple (AAPL) opted for more expensive OLED screens in its recently launched cutting-edge device, the iPhone X.
There's more behind the 199% gain OLED shares have dished out this year than just Apple's interest in the technology, however. In many regards this is a real coming-of-age story for Universal Display, as OLED manufacturing costs (and by extension, their cost to consumers) have finally fallen to palatable levels.
How has biopharma outfit Bluebird Bio (BLUE) mustered a 212% rally since the end of 2016? In simplest terms, the company has come up with an amazingly effective cancer drug.
Bluebird's bb-2121 is one of only a handful of treatments that fall into the relatively new CAR-T group of therapies, which essentially reengineer a patient's own immune system to effectively fight disease.
In June, Bluebird announced the results from an early trial of bb-2121 as a treatment for relapsed/refractory multiple myeloma. The drug showed an average 89% response rate as a therapy for several types of tumors. There's still plenty more testing to be done, but in that the FDA has already approved a couple of CAR-T therapies, and this one clearly shows great promise, the interest in the stock makes plenty of sense.
You can chalk the bulk of the 225% advance Puma Biotechnology (PBYI) shares have dished out this year to one thing... the approval of its breast cancer drug Nerlynx. The FDA approved it back in June as a treatment for HER2+ breast cancer, though the euphoria surrounding the drug was doing bullish work before the FDA's green light, and has continued to prod the stock higher since then.
The advance hasn't exactly been in a straight line, mind you. Though the company sold $6.1 million worth of Nerlynx in its first quarter of approval (easily topping estimates), somehow the market thought the beat would be even bigger. Shares fell 19% the day that news was released.
Even with that stumble, however, PBYI remains one of the years very biggest winners.
After a disastrous 2015/2016 meltdown, many investors figured upscale home decor retailer Restoration Hardware (RH)—or now, just called RH—was a lost cause. Revenue was starting to slump, and income was in a decided downtrend as the company struggled to find its place. There wasn't much to be excited about.
Big mistake. Whatever wasn't being done right in Restoration Hardware then has since been fixed, as evidenced by rekindled top and bottom line growth. Sales for the past four quarters are up 7.7%, and the bottom line appears to be growing again. Best of all, RH shares are up a whopping 225% year-to-date.
Granted, the timing of the bottom helped. The stock was near its ultimate bottom right at the turn of the year. Still…
Last but not least, like RH, fortuitous timing of its ultimate bottom helped Weight Watchers International (WTW) become 2017's biggest blue-chip winner. Then again, lucky timing or not, the 303% gain WTW shares have seen this year is nothing less than jaw-dropping.
At least some of the credit has to be given to spokesperson Oprah Winfrey. She started touting the weight loss outfit in late 2015, reviving interest in the increasingly irrelevant company. Oprah can't get all the credit though. The company is tweaking everything it does from top to bottom, and as of the most recently completed quarter has logged eight straight quarter's of year-over-year growth.
Investors are also rather excited about new CEO Mindy Grossman, who wants to redefine Weight Watchers as a wellness company rather than just a weight-loss assistant.
This article is from James Brumley of InvestorPlace. As of this writing, Brumley did not personally hold a position in any of the aforementioned securities.
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