In this article, we discuss the 10 best-performing stocks in 2021. If you want to skip our detailed analysis of these companies, go directly to the 5 Best-Performing Stocks in 2021.
Supply chain problems leading to inflation worries and growth stock volatility have dominated the headlines in the financial world over the past few months, damaging prospects of a post-pandemic economic recovery that looked imminent with the vaccine rollout at the turn of the year. However, stimulus payments and reports of a massive infrastructure overhaul plan have offset some of these concerns, giving a much-needed boost to the energy, manufacturing, and mining industries in the United States.
Some of the stocks that have registered record gains over the last twelve months include Tesla, Inc. (NASDAQ: TSLA), the California-based electric vehicle maker, Sea Limited (NYSE: SE), the Singapore-based holding company with stakes in ecommerce platform Shopee and the video game business, and Square, Inc. (NYSE: SQ), the California-based digital payments company. All these stocks have registered triple digits growth over the past few months.
However, in recent weeks, these firms have been hit by a broader regression in growth stocks, with Tesla, Inc. (NASDAQ: TSLA) sliding in value amid a backlash regarding the safety features in their cars. Media reports indicate that net orders for Tesla vehicles in China dropped from over 18,000 in April to less than 9,800 in the month of May. Tesla, Inc. (NASDAQ: TSLA) is also facing increased competition in the US, with rival Ford debuting an all electric truck last month.
Sea Limited (NYSE: SE) has been one of the best-performing stocks this year with the company reporting a revenue of close to $2 billion for the first quarter of 2021, up more than 146% compared to the revenue for the same period last year and beating market estimates by $20 million. Another indirect indicator of the interest in Sea Limited (NYSE: SE) stock is hedge fund interest, with 14 of the 20 best-performing hedge funds in the Insider Monkey database bullish on the company at the end of the previous quarter.
Digital payments firm Square, Inc. (NYSE: SQ) is another solid performer this year. The stock went on a rally through the pandemic as the coronavirus lockdowns supported the core business model of the company. The $400 million in crypto-related investments also helped Square, Inc. (NYSE: SQ) as cryptocurrencies like Bitcoin climbed to record highs of over $64,000 in April before taking a breather over the last month. With digital dealings set to increase in 2021, Square, Inc. (NYSE: SQ) still has a lot of room to grow in the fintech sector.
Fintech has perhaps been the most important stock influencer in the past few years as established financial institutions stagger from the revolutionary impact it has had on the everyday lives of citizens in such a short space of time. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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With this context in mind, here is our list of the 10 best-performing stocks in 2021. While selecting these stocks, some of the prime considerations were their year-to-date and yearly performances. Stocks that have performed well for most of the 2021, even though they might be experiencing short-term price fluctuations right now, have also been included to provide a clearer picture of the overall market this year.
Best-Performing Stocks in 2021
10. Ashford Inc. (NYSE: AINC)
Number of Hedge Fund Holders: 2
Year-to-Date Gains: 208%
Ashford Inc. (NYSE: AINC) is a Texas-based investment management company founded in 2014. It is placed tenth on our list of 10 best-performing stocks in 2021. The company’s shares have returned more than 208% to investors year-to-date. The company provides investment management services primarily to the real estate and hospitality markets in the United States. The company has a market cap of over $81 million and posted more than $134 million in annual revenue last year.
In quarterly earnings results posted on May 5, Ashford Inc. (NYSE: AINC) reported earnings per share of $0.65 for the first three months of 2021, beating market predictions by $0.19. The revenue over the period was close to $64 million, down 52% year-on-year.
At the end of the first quarter of 2021, 2 hedge funds in the database of Insider Monkey held stakes worth $1 million in Ashford Inc. (NYSE: AINC), the same as in the preceding quarter worth $627,000.
Just like Tesla, Inc. (NASDAQ: TSLA), Sea Limited (NYSE: SE), and Square, Inc. (NYSE: SQ), Ashford Inc. (NYSE: AINC) is one of the best-performing stocks in 2021.
9. The Manitowoc Company, Inc. (NYSE: MTW)
Number of Hedge Fund Holders: 17
Year-to-Date Gains: 100%
The Manitowoc Company, Inc. (NYSE: MTW) is a Wisconsin-based manufacturing company founded in 1902. It is ranked ninth on our list of 10 best-performing stocks in 2021. The stock has offered investors returns close to 100% in the past five months. Some of the products that the company makes and sells include mobile telescopic cranes, tower cranes, and lattice-boom crawlers, among others. Some of the brands it owns in the crane sector include famous names such as Grove, Shuttlelift, and National Crane.
On May 5, The Manitowoc Company, Inc. (NYSE: MTW) posted quarterly earnings results, reporting earnings per share of -$0.06 for the first three months of 2021, missing market estimates by $0.06. The revenue for the first quarter of 2021 was $354 million, up 7.6% year-on-year.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm DE Shaw is a leading shareholder in The Manitowoc Company, Inc. (NYSE: MTW) with 608,961 shares worth more than $12.5 million.
Just like Tesla, Inc. (NASDAQ: TSLA), Sea Limited (NYSE: SE), and Square, Inc. (NYSE: SQ), The Manitowoc Company, Inc. (NYSE: MTW) is one of the best-performing stocks in 2021.
8. Atlantic American Corporation (NASDAQ: AAME)
Number of Hedge Fund Holders: 2
Year-to-Date Gains: 112%
Atlantic American Corporation (NASDAQ: AAME) is a Georgia-based life insurance company founded in 1968. It is ranked eighth on our list of 10 best-performing stocks in 2021. The company’s shares have returned more than 112% to investors since the start of the year. Some of the insurance products the firm offers include life, health, and property and casualty insurance policies. The firm primarily operates in the southern part of the United States. The company posted close to $200 million in annual revenue in 2020.
Atlantic American Corporation (NASDAQ: AAME) is a solid option for income investors as it pays a regular and healthy dividend to shareholders. In late March, the firm declared a quarterly dividend of $0.02 per share, in line with previous. The forward yield was 0.43%.
At the end of the first quarter of 2021, 2 hedge funds in the database of Insider Monkey held stakes worth $340,000 in Atlantic American Corporation (NASDAQ: AAME), up from 1 in the previous quarter worth $117,000.
Just like Tesla, Inc. (NASDAQ: TSLA), Sea Limited (NYSE: SE), and Square, Inc. (NYSE: SQ), Atlantic American Corporation (NASDAQ: AAME) is one of the best-performing stocks in 2021.
7. The Joint Corp. (NASDAQ: JYNT)
Number of Hedge Fund Holders: 21
Year-to-Date Gains: 174%
The Joint Corp. (NASDAQ: JYNT) is an Arizona-based healthcare company founded in 2010. It is placed seventh on our list of 10 best-performing stocks in 2021. The company’s shares have returned more than 174% to investors year-to-date. The firm focuses on the development and running of chiropractic clinics in the United States. It controls more than 600 such facilities spread across 34 states in the North American country. In addition to direct ownership, the firm also offers franchise operations to select investors.
The Joint Corp. (NASDAQ: JYNT) posted quarterly earnings results on May 6, reporting earnings per share of $0.16 for the first three months of 2021, beating market estimates by $0.11. The revenue over the period was $17.5 million, up 28% year-on-year.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Bandera Partners is a leading shareholder in The Joint Corp. (NASDAQ: JYNT) with 1.6 million shares worth more than $81 million.
Just like Tesla, Inc. (NASDAQ: TSLA), Sea Limited (NYSE: SE), and Square, Inc. (NYSE: SQ), The Joint Corp. (NASDAQ: JYNT) is one of the best-performing stocks in 2021.
In its Q4 2020 investor letter, Main Capital, an asset management firm, highlighted a few stocks and The Joint Corp. (NASDAQ: JYNT) was one of them. Here is what the fund said:
“The Joint (JYNT) is a rapidly growing franchisor (~90% of locations) and owner (~10% of locations) of nearly 600 chiropractic clinics across the U.S. that operate on a private-pay, cash-based model. The company was founded over 20 years ago, with the vision of improving the quality of life for its customers through routine chiropractic care that is convenient, affordable, and patient-centric.
Driven by a focus on customer satisfaction, JYNT has made it more convenient for patients to see doctors at its clinics than at traditional practices. The company’s locations are clean and modern-looking, wait times are typically short and ancillary products and services are not aggressively pushed to patients.
The company’s simplistic model is also a win for its staff; doctors can concentrate on patient care while administrative staff can focus on customer service and scheduling rather than them both having to deal with complex insurance contracting, documenting, billing, and collecting.
This efficient operating model allows JYNT doctors to see nearly 3x the number of patients compared to traditional competitors. In turn, the company can price its services well below typical levels. In fact, most patients would pay more in insurance co-payment at a traditional chiropractor than they would in total if they just went to a JYNT clinic and paid fully in cash, where the average spend per visit is $29.
Now, if it is better for patients, better for employees and cheaper than the competition, the unit economics must suck, right? Well, not quite.
A typical corporate location generates greater than 50% ROIC and has a payback of less than 3 years. Each unit requires an investment of approximately $235k, including $180k of build-out costs and $55k of first year losses. However, by year 3 the location generates roughly $500k of revenue and $130k of operating profit. Not too shabby.
For franchisees, units generate greater than 35% ROICs and paybacks of approximately 3.5 years, after considering the added $40k per-location franchise fee and 7% royalty on gross sales. Also quite strong. Despite its largely franchised model, the company has been largely unprofitable until very recently, as it has invested in corporate infrastructure to support its growth ambitions. However, in 2019 the company finally stepped over these corporate investments and started to generate earnings that are now being used to aggressively expand the corporate-owned store base.
Given the compelling economics outlined above, the rapid acceleration of corporate-owned stores should lead to significant growth in future earnings and free cash flow that is not yet fully appreciated by investors.
In the coming 3-5 years, I anticipate that JYNT will grow its owned units by 2-3x, while the franchised location count should continue to grow at a double digit CAGR. In this scenario, I expect that JYNT will grow its EBITDA and EPS by over 5x current levels to more than $50 million and $2, respectively.
Importantly, the growth outlook for the company will likely remain quite bright well beyond this projection period, as the company will still be underpenetrated relative to the 1,800+ clinics management believes it can build in North America and compared to the broader North American market which is comprised of ~50k chiropractic clinics.
Despite JYNT’s appreciation from the Fund’s average cost of approximately $17 per share, I believe there continues to meaningful upside to the shares as the company continues to execute against the growth opportunities in front of it.”
6. CONSOL Energy Inc. (NYSE: CEIX)
Number of Hedge Fund Holders: 15
Year-to-Date Gains: 132%
CONSOL Energy Inc. (NYSE: CEIX) is a Pennsylvania-based energy company founded in 1864. It is ranked sixth on our list of 10 best-performing stocks in 2021. The stock has offered investors returns exceeding 132% year-to-date. The company primarily produces and exports bituminous coal. The firm owns and runs the Pennsylvania Mining Complex which comprises the Bailey Mine, the Enlow Fork Mine, the Harvey Mine, and the Central Preparation Plant. It has over 657 million tons of proven and probable coal reserves at the complex.
In quarterly earnings results posted in early May, CONSOL Energy Inc. (NYSE: CEIX) reported a revenue of $284 million for the first three months of 2021, up 11.4% year-on-year. Coal shipments during the period were 6.9 million tons, the highest since the second quarter of 2019.
At the end of the first quarter of 2021, 15 hedge funds in the database of Insider Monkey held stakes worth $44 million in CONSOL Energy Inc. (NYSE: CEIX), the same as in the previous quarter worth $45 million.
Just like Tesla, Inc. (NASDAQ: TSLA), Sea Limited (NYSE: SE), and Square, Inc. (NYSE: SQ), CONSOL Energy Inc. (NYSE: CEIX) is one of the best-performing stocks in 2021.
Click to continue reading and see 5 Best-Performing Stocks in 2021.
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Disclosure: None. 10 Best-Performing Stocks in 2021 is originally published on Insider Monkey.
