It is possible to find shares that can give us returns in excess of 10 times our investment. But, the key here is not so much as to finding them, but having the mental fortitude to hold onto them. In slightly more than a decade since the start of 2003, the world has been through the Great Financial Crisis of 2007-2009, the Eurozone debt debacle involving Greece in 2010, the American Fiscal Cliff in 2012, the Cyprus bank-bailout (again, in the Eurozone) in 2013 and most recently, the possible slowdown of America’s Quantitative Easing programme and China’s weak economic…
In slightly more than a decade since the start of 2003, the world has been through the Great Financial Crisis of 2007-2009, the Eurozone debt debacle involving Greece in 2010, the American Fiscal Cliff in 2012, the Cyprus bank-bailout (again, in the Eurozone) in 2013 and most recently, the possible slowdown of America’s Quantitative Easing programme and China’s weak economic numbers. That’s a lot of trouble and I’m not even done!
But yet, here are five companies that have weathered it all and more importantly, given long-term shareholders – the ones with the fortitude and prescience to look far into the horizon – returns of 1,000% or more in that time frame.
We’ll start with Super Group (SGX: S10). Who knew instant coffee and non-dairy creamers could be sexy in the eyes of the stock market? But that’s what Super Group brought to the table with massive success with its shares up by 1974% (inclusive of dividends) to $3.85. It’s seldom the case where excellent share-price returns aren’t backed up by equally impressive corporate performance. On that front, Super Group belongs to the majority as its revenue and earnings have both seen striking jumps of 261% and 608% from 2003 to 2012.
Boustead Singapore (SGX: F9D) provides infrastructure-related engineering services and geospatial imaging-technologies. Its shares have leaped by a tremendous 4233% to $1.30 from $0.03 at the start of 2003, including dividends. The company generates prodigious amounts of cash from its businesses as evidenced by a total of $365m in free cash flow produced over its last seven completed financial years. Shareholders have certainly been rewarded with dividends from that stream of cash and Boustead’s currently yielding 5.4%, more than twice the market’s yield of 2.5%.
Conglomerates Jardine Strategic Holdings (SGX: J37) and Jardine Matheson Holdings (SGX: J36) both belong to the sprawling Jardine Matheson Group and both have had astounding returns over the past decade and more. With the return from dividends included, JSH has gained a total of 1428% to US$36.84 while JMH has increased by 963% (very close to a 1000% return) to US$57.1. Besides boasting market-beating returns, the two conglomerates can also lay claim to the title of having at least 10 consecutive years of dividend increases.
Rounding up the gang of five is Dairy Farm International Holdings (SGX: D01), currently selling at US$11.9. Its share price has grown by 1508% since the start of 2003. The retailer operates more than 5,600 outlets in Asia and Singaporeans might be familiar with the Giant hyper-marts that Dairy Farm owns here. Excluding special dividends, the company’s dividends have grown by 400% from US$0.046 to US$0.23 from 2003 to 2012. Interestingly, Dairy Farm is actually 78% owned by JSH and the latter has no doubt benefitted from the growing dividends that the former has doled out over the years.
Foolish Bottom Line
These shares have all delivered great returns for long-term shareholders. But, it also pays to note that despite their gravity-defying climbs over the past 10 years, these shares are not immune to market volatility.
For example, Super Group has fallen by 21.7% from its 52-week high of $4.92 set on 13 May 2013. Investors who couldn’t stomach the fall and sold out, might just have missed out on another 5-10 years of market-beating returns if Super Group can keep up with its historical corporate performance in the future.
Perhaps, the real reason why it’s so hard to achieve returns of 1000% or more is not because of the scarcity of such shares (yes, such shares are scarce because good businesses don’t just fall out of the sky), but because of the inability of investors to hold-on tight to good businesses they have found when the markets inevitably goes on a roller-coaster ride ever so often.
So, let’s stop being foolish and be Foolish instead. I’ll be setting my sights 5-10 years out into the horizon, looking on at the market’s intermittent euphoria and despair with bemusement. What about you?
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chong Ser Jing owns shares in Super Group.