18 Growth Stocks: Final Thoughts

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As our 10-Bagger Portfolio approaches its one-year anniversary, our performance has been somewhat mixed. LinkedIn (NYSE: LNKD  ) and Netflix (NASDAQ: NFLX  ) have been big winners for us, but we've also had some pretty big losers, too. Overall, our portfolio is losing to the market, though it has delivered a positive return so far.

We never believed for a moment, however, that we'd be able to effectively assess our performance after only one year. Our true aim all along was to identify multibaggers for the long haul. Are we on track to deliver on that goal? Frankly, we believe it's too early to say.

Parting is such sweet sorrow
Sadly, we'll never know for certain how the 10-Bagger portfolio might have performed over a longer time horizon. After giving it a lot of thought, we decided to discontinue our management of the portfolio.

Recently, our day-to-day roles here at the Fool have been taking up more and more of our time, and we came to the stark realization that we could no longer devote the necessary attention to our 10-Bagger portfolio. Instead of keeping it alive and just checking in on it sporadically, we felt the prudent thing to do was to shut it down altogether. This was a very tough decision for us to make.

We didn't want to depart (so to speak) without providing some additional guidance to anyone out there who may have been following us. Below are some final thoughts on all 18 stocks in our portfolio:

1. Denbury Resources. The vulture of the oil patch continues to buy properties for its tertiary recovery technology. We believe this stock is still very attractive today.

2. Zipcar. It's hard to believe the company sold out to Avis, recently. The lesson from this investment is that growth investors don't like to see slowing growth. Ultimately, our total position in Zipcar is down 15%.

3. Infinera. The company's latest product, the DTN-X, continues to gain traction. A Tier 1 carrier signed on as a customer recently, which is a great sign.

4. MAKO Surgical (UNKNOWN: MAKO.DL  ) . The orthopedic surgical robot maker has experienced a slowdown recently. But the company expects growth to pick up, and the price is very attractive today. Alas, this investment is our biggest loser – our total position is down around 46% at the moment.

5. InvenSense. InvenSense has one of the biggest tailwinds behind it: mobile computing. The motion sensor maker is tripling its chip production to take advantage of rising demand. 

6. LinkedIn. LinkedIn is a purpose-driven company that is going to make lots of money over time. That's a great combination, and we expect the professional networking company to be a big winner for investors. Our total position is up 63%.

7. Fusion-io. Fusion-io has been a disappointment so far. The company has a nice technology that's catching on, but the market just won't get behind the stock.

8. Google. Google wants to become the go-to information platform over the next five to 10 years. We think it's very likely that the company will achieve its goal, and believe the stock is cheap today.

9. Apple. Apple's stock has gone from hot to not almost overnight. Over the past year, we've been very bullish on the company. We still like it, and think investors are being shortsighted about the company's prospects.

10. Facebook (NASDAQ: FB  ) . Unlike Apple, Facebook has gone from zero to hero. And it's well deserved, as the social networking company is making great strides with its advertising platform. We were early investors in Facebook, and many thought it was folly at the time. Our overall position is up 19%, however.

11. Intel. Our thesis was that Intel would enter the mobile computing market, and make an impact. We wonder if that outlook will actually play out in time. At least Intel has a nice yield, and dominates the PC and server markets. We're not as bullish on this company as we were when we first recommended it, however.

12. Solazyme. The biofuels company continues to make progress by adding manufacturing capacity. If the economics improve, the stock can still be a long-term winner. But it's a risky bet, and only deserves a tiny portion of a portfolio.

13. ExxonMobil. The leading global energy company remains an attractive investment, and will continue to serve shareholders by investing in great projects, increasing its dividend, and repurchasing shares.

14. Netflix. Netflix continues to make excellent content deals. This will attract incremental streaming members, who are very, very valuable. The company was also one of our big winners – our total position is up 49%.

15. TripAdvisor (NASDAQ: TRIP  ) . The online travel research firm continues to grow at a very nice clip, making the company's moat stronger. This one is up 31% for us.

16. Starbucks. With Howard Schultz at the helm, Starbucks will remain dominant for a very long time. And we love how it's building relationships with customers using social media.

17. Enphase Energy. The microinverter maker for solar panels continues to push forward. Like Solazyme, success is not guaranteed and any investment should be a very small allocation.

18. Spectra Energy. The pipeline company isn't going to be displaced anytime soon, which means those dividend checks will keep flowing into investors' brokerage accounts.

Continuing the journey
If you'd like to continue hunting for multibaggers in the future, we highly recommend our Motley Fool Rule Breakers investing service, which offers up the type of growth ideas we were looking for. If it's free stock ideas that you're after, then be sure to take a closer look at all of the portfolios on our "Real-Money Stock Picks" page.

Read/Post Comments (4) | Recommend This Article (24)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 24, 2013, at 1:19 AM, CMFAnurag wrote:

    I think this portfolio was a big failure considering a double digit lag (19.55% to-date) from the market despite solid diversification into 18 firms. I understand that 1 year is too small of a timeframe but the lag is simply too great to recover from easily. You have to beat the market by 20% to even get to breakeven to the market performance. This is tough. That the portfolio results were positive is hardly a consolation for a portfolio that aims for 10 baggers.

    I fail to understand how making an average of just 3 trades per month accompanied by 3 articles and hardly any discussion on the boards can be so onerous when the goal is to create a long term portfolio that aims for 10 baggers. Surely a real 10 bagger portfolio (after the fact) would involve having stocks requiring very little baby sitting.

    It is not a bad thing to lose. I would exhort the Fools to continue with it and not give it up in this manner.


  • Report this Comment On January 24, 2013, at 9:48 AM, TMFBane wrote:

    Thanks for your comments! Those are all reasonable points. For me, I found there were solid arguments on both sides, so it was one of those decisions that could have gone either way.

    One of the problems from a return perspective was that we had a lot of cash in an up market. i hate it, however, when people make excuses about returns. Our performance was what it was. And I can see why folks would criticize it at this point.

    Nice to see Netflix up big today, however! I think we recommended some solid growth companies that should do well over the long term.



  • Report this Comment On January 24, 2013, at 7:18 PM, CMFAnurag wrote:

    Hi John

    Portfolio management is totally different ball game relative to individual stock picking. Cash management is a very important aspect of it. So far only 3 out of 20 rising star portfolios beat index and only one at a good margin. On a public information basis, HG, PRO and MDP are all losing to market after several years. Fool funds are not doing a whole lot better either.

    Rising star series is an applaudable effort by TMF to discover the secrets of portfolio management in such public manner. I am disappointrd that so many have given up. Of course, somehave left TMF.

    I say let the returns not deter any of the rising star Fools. Continue with the process. Take it as a 10 year plan. Share strategies and experiment. This is quite valuable. I had been enjoying your excellent articles. Please change your minds - both of you.


  • Report this Comment On January 25, 2013, at 2:29 AM, TMFtheEdge wrote:

    I second Anurag's call/pleading for both of you to change your mind. Have been wondering why your excellent twitter feed had gone silent.

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